US consumer spending dips for first time in a year as prices jump

               

U.S. consumer spending fell for the first time in a year in April, but there are signs inflation is stirring, with an inflation gauge rising at its quickest pace since November 2012.

The Commerce Department said on Friday consumer spending slipped 0.1 percent after rising by a revised 1.0 percent in March, which was the largest gain since August 2009.

Last month's decline was the first since April last year. Spending was previously reported to have increased 0.9 percent in March. Economists polled by Reuters had forecast consumer spending, which accounts for more than two-thirds of U.S. economic activity, rising 0.2 percent in April.

The decline will probably do little to change expectations for a sharp rebound in growth in the second quarter after the economy contracted in the January-March period for the first time in three years.

Even though demand cooled, inflation is creeping up. A price index for consumer spending increased 0.2 percent last month after rising by the same margin in March.