A report from the US Commerce Department showed that consumer spending dipped for a second straight month. AFP
A report from the US Commerce Department showed that consumer spending dipped for a second straight month. AFP
A report from the US Commerce Department showed that consumer spending dipped for a second straight month. AFP
A report from the US Commerce Department showed that consumer spending dipped for a second straight month. AFP

US consumer spending dips for second straight month as inflation cools


Kyle Fitzgerald
  • English
  • Arabic

A key measurement for US inflation released on Friday showed that prices continued to cool in December as consumer spending dipped, clearing the way for the Federal Reserve to issue a smaller interest rate increase when it meets next week.

The personal consumption expenditures (PCE) price index, the Fed's preferred inflation metric, rose by 5 per cent in December year-on-year, down from November's rate of 5.5 per cent, data from the Commerce Department showed.

The PCE price index ticked up by 0.1 per cent from November to December. Prices for goods decreased 0.7 per cent and energy costs decreased 5.1 per cent. Prices for services and food increased.

Core PCE, which excludes food and energy, increased by 4.4 per cent year-on-year, down from 4.7 per cent in November.

The latest data point to a decrease in spending, as Americans appear to be feeling the pain of rising costs.

PCE is the Fed's preferred gauge of inflation as it provides a more comprehensive understanding of consumer behaviour and how households react to changing prices.

The Commerce Department's report showed that consumer spending dipped by 0.2 per cent for the month of December, while personal incomes rose by 0.2 per cent.

The dip in consumer spending increases the risk of the US entering a recession, as it shows that households are changing their behaviour — such as purchasing cheaper goods and services — in reaction to higher prices.

Goldman Sachs estimates that the probability of the US entering a recession this year is 35 per cent.

The Fed raised its interest rate seven times last year to the range of 4.25 per cent to 4.5 per cent, increasing borrowing costs such as mortgages and car loans.

Perhaps nothing has been hurt more by the Fed than the housing market, which saw mortgage rates climb to more than 7 per cent last year. The average long-term mortgage rate this week dipped to 6.13 per cent, showing some signs of relief, according to mortgage buyer Freddie Mac.

Policy officials are expected to raise interest rates by a quarter of a percentage point when they meet next week.

Coming 2 America

Directed by: Craig Brewer

Starring: Eddie Murphy, Arsenio Hall, Jermaine Fowler, Leslie Jones

3/5 stars

COMPANY PROFILE

Name: Lamsa

Founder: Badr Ward

Launched: 2014

Employees: 60

Based: Abu Dhabi

Sector: EdTech

Funding to date: $15 million

MATCH INFO

Inter Milan 2 (Vecino 65', Barella 83')

Verona 1 (Verre 19' pen)

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La Mer lowdown

La Mer beach is open from 10am until midnight, daily, and is located in Jumeirah 1, well after Kite Beach. Some restaurants, like Cupagahwa, are open from 8am for breakfast; most others start at noon. At the time of writing, we noticed that signs for Vicolo, an Italian eatery, and Kaftan, a Turkish restaurant, indicated that these two restaurants will be open soon, most likely this month. Parking is available, as well as a Dh100 all-day valet option or a Dh50 valet service if you’re just stopping by for a few hours.
 

Dust and sand storms compared

Sand storm

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Dust storm

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The specs
Engine: 4.0-litre flat-six
Power: 510hp at 9,000rpm
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
Price: From Dh801,800
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Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem

Director: Joseph Kosinski

Rating: 4/5

SPECS
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While you're here

Last 10 winners of African Footballer of the Year

2006: Didier Drogba (Chelsea and Ivory Coast)
2007: Frederic Kanoute (Sevilla and Mali)
2008: Emmanuel Adebayor (Arsenal and Togo)
2009: Didier Drogba (Chelsea and Ivory Coast)
2010: Samuel Eto’o (Inter Milan and Cameroon)
2011: Yaya Toure (Manchester City and Ivory Coast)
2012: Yaya Toure (Manchester City and Ivory Coast)
2013: Yaya Toure (Manchester City and Ivory Coast)
2014: Yaya Toure (Manchester City and Ivory Coast)
2015: Pierre-Emerick Aubameyang (Borussia Dortmund and Gabon)
2016: Riyad Mahrez (Leicester City and Algeria)

EMERGENCY PHONE NUMBERS

Estijaba – 8001717 –  number to call to request coronavirus testing

Ministry of Health and Prevention – 80011111

Dubai Health Authority – 800342 – The number to book a free video or voice consultation with a doctor or connect to a local health centre

Emirates airline – 600555555

Etihad Airways – 600555666

Ambulance – 998

Knowledge and Human Development Authority – 8005432 ext. 4 for Covid-19 queries

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India team for Sri Lanka series

Test squad: Rohit Sharma (captain), Priyank Panchal, Mayank Agarwal, Virat Kohli, Shreyas Iyer, Hanuma Vihari, Shubhman Gill, Rishabh Pant (wk), KS Bharath (wk), Ravindra Jadeja, Jayant Yadav, Ravichandran Ashwin, Kuldeep Yadav, Sourabh Kumar, Mohammed Siraj, Umesh Yadav, Mohammed Shami, Jasprit Bumrah.

T20 squad: Rohit Sharma (captain), Ruturaj Gaikwad, Shreyas Iyer, Surya Kumar Yadav, Sanju Samson, Ishan Kishan (wk), Venkatesh Iyer, Deepak Chahar, Deepak Hooda, Ravindra Jadeja, Yuzvendra Chahal, Ravi Bishnoi, Kuldeep Yadav, Mohammed Siraj, Bhuvneshwar Kumar, Harshal Patel, Jasprit Bumrah, Avesh Khan

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Starring: Colin Farrell, Cristin Milioti, Rhenzy Feliz

Creator: Lauren LeFranc

Rating: 4/5

Specs

Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request

Updated: January 27, 2023, 6:21 PM`