U.S. prices jumped higher as consumers spent more on goods, housing, and imports in the first quarter compared with earlier estimates, data from the Commerce Department showed Thursday.
Personal consumption expenditure jumped 11.3 percent in the January through March period compared with the prior quarter, an unexpected increase from the preliminary estimate of 10.7 percent.
The upward revision to consumer spending indicates the economy was on a stronger footing as the year began than was thought, bringing into doubt the need for the Biden administration’s costly American Rescue stimulus plan and possibly hurting the chances of the other big spending plans the White House has been pushing.
Price increases were also revised up, indicating stronger inflationary pressures than seen earlier. The personal consumption price index rose 3.7 percent, up from the earlier estimate of 3.5 percent and a big acceleration from the 1.5 percent increase recorded in the fourth quarter of 2020.