April Sees Surge in US Consumer Spending and Inflation Rise

US consumer spending rose 0.8% in April, boosted by higher spending on vehicles and services such as insurance and healthcare, while inflation accelerated with the personal-consumption expenditures price index rising 0.4% in April from the prior month and 4.4% from a year earlier. The Fed's preferred gauge for inflation rose this week, putting pressure on the Fed to increase interest rates in June. The solid labor market has kept unemployment low and wage growth elevated, providing fuel for consumer spending, the main driver of economic growth.