U.S. Consumer Spending Shows Economic Resilience Amid Inflation Concerns

U.S. consumer spending rose in November amid strong demand, highlighting economic resilience. Despite moderate inflation, concerns about potential policies from President-elect Trump's administration persist. Strong wage gains and low layoffs are driving spending, although inflation remains above the Federal Reserve's target, influencing interest rate projections.

In November, U.S. consumer spending increased due to strong demand, emphasizing the economy's robustness. This trend prompted the Federal Reserve to reduce its expectations for 2025 interest rate cuts. Inflation showed moderate growth, with core inflation remaining above the Fed's target, despite positive readings.

President-elect Donald Trump's proposed policies, including tax cuts and tariffs, could potentially exacerbate inflation concerns. Strong consumer demand, fueled by income growth and wealth effects, continues to drive economic activity, although inflation remains a concern for Fed policy.

Consumer spending, accounting for over two-thirds of U.S. economic activity, rose 0.4% in November. The increase was driven by purchases of vehicles and recreational goods. Despite strong wage growth supporting spending, economists caution that lower-income households are under financial pressure.

(With inputs from agencies.)