US economic strength was demonstrated in January, as the Federal Reserve's preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index, rose 5.4% from a year earlier and 0.6% from December to January. Consumer spending also increased 1.8% from December, though goods prices declined 0.7%. The Core PCE index rose 0.2% from December to January, indicating that inflation remains entrenched in the US economy and the Fed is likely to keep raising interest rates.
