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U.S. consumer spending and inflation rise in April

STORY: American consumers spent more than expected in April, boosting the economy's growth prospects for the second quarter.

Commerce Department data released Friday showed an increase in consumer spending of 0.8% last month; that’s twice as much as what economists polled by Reuters had expected.

The increase comes even as prices continued to rise in April.

The personal consumption expenditures price index -- the Federal Reserve’s preferred gauge of inflation -- rose 0.4% in April after gaining 0.1% in March.

That puts the annual inflation rate at 4.4% for April – it had been at 4.2% the month prior.

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The uptick could prompt the Fed to raise interest rates again next month.

Credit has become more expensive since the Fed embarked on its fastest monetary policy tightening campaign since the 1980s to tame inflation.

Banks also have tightened lending following recent financial market turmoil.

But recent data showing a rebound in factory production and a pickup in business activity suggests the economy is picking up speed after a slow start to the year.