By Gwynn Guilford

U.S. households spent more modestly in February as core price increases eased, possible signs of slowing economic momentum on the eve of March's banking turmoil.

Consumer spending increased a seasonally adjusted 0.2% in February, from January's revised 2% increase, which was the largest one-month gain in nearly two years, the Commerce Department said Friday. When adjusted for rising prices, spending fell 0.1% in February from the prior month, after rising a revised 1.5% in January.

The core personal-consumption expenditures price index--one of the Fed's preferred gauges of inflation--climbed 4.6% in February from a year earlier, down from 4.7% the prior month. Many economists see the core measure, which omits volatile food and energy prices, as a better predictor of future inflation.

The overall PCE-price index rose 5% in February from a year earlier, down from a revised 5.3% in January.

Price increases moderated on a month-to-month basis. The overall PCE-price index increased 0.3% in February from the prior month, compared with 0.6% in January. Core prices rose 0.3%, in February from the prior month, compared with January's revised 0.5% gain.

Write to Gwynn Guilford at gwynn.guilford@wsj.com

(END) Dow Jones Newswires

March 31, 2023 09:07 ET (13:07 GMT)

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