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U.S. Inflation-Adjusted Spending Falls as Prices Temper Demand

  • Real outlays dropped 0.4% in February after a 2.1% surge
  • Fed’s preferred inflation gauge rises 6.4% from year ago
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WATCH: Spending slows down in February.Source: Bloomberg
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U.S. inflation-adjusted consumer spending declined in February, suggesting the fastest pace of price increases in four decades is starting to temper demand. 

Purchases of goods and services, adjusted for changes in prices, fell 0.4% from the prior month, following a 2.1% jump in January, according to Commerce Department figures Thursday. Spending on goods settled back after the prior month’s surge, while a decline in Covid-19 cases supported a pickup in outlays for services.