U.S. consumer spending falls; inflation cooling

U.S. consumer spending fell in December, putting the economy on a lower growth path heading into 2023, while inflation continued to subside, which could give the Federal Reserve room to further slow the pace of its interest rate hikes next week.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, dropped 0.2% last month, the Commerce Department said on Friday. Data for November was revised lower to show spending slipping 0.1% instead gaining 0.1% as previously reported. Economists polled by Reuters had forecast consumer spending dipping 0.1%.