U.S. Consumer Spending Picked Up Along With Inflation

Consumer spending in the U.S. rose more than forecast in January, reflecting a jump in prices that is eroding Americans' buying power.

The 0.4 percent increase in purchases followed a 0.3 percent gain in December, the Commerce Department said today in Washington. The Federal Reserve's preferred measure of inflation climbed 0.3 percent, the most in four months.

After adjusting for higher prices, spending stalled for a second month, increasing concern that the biggest part of the economy is faltering. Confidence among consumers is waning as fuel costs jump, property values decline and banks restrict lending.

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