Investing.com - The personal consumption expenditures price index accelerated slightly in December, in line with estimates, while the pace of consumer spending unexpectedly rose, according to a raft of data that will likely be monitored by Federal Reserve rate-setters.
On a monthly basis, the PCE price index increased by 0.3% last month, up from 0.1% in November, Commerce Department data showed on Friday. In the 12 months until December, the number came in at 2.6%, compared with 2.4% in the prior month. Both matched economists' expectations.
The core reading, stripping out more volatile food and energy components, the PCE index was 0.2% month-on-month and 2.8% annually. The prior figures were at 0.1% and 2.8%, respectively.
Meanwhile, personal spending -- a key component of economic activity -- rose by 0.7% month-on-month, faster than an upwardly-revised level of 0.6% in November, as U.S. consumers were buoyed by a solid labor market and ongoing wage growth. Forecasts had called for an uptick of 0.5%.
The Fed, which slashed interest rates by a full percentage point last year, closely tracks the PCE price measures as it gauges monetary policy. Earlier this week, officials chose to leave rates unchanged and signaled that they would adopt a wait-and-see approach to further borrowing cost reductions.
Policymakers have recently flagged uncertainty around the outlook for the wider economy, particularly the impact of President Donald Trump's plans for tariffs, taxes and immigration. Some economists have said his moves could refuel inflationary pressures in the world's largest economy.