Official figures show that US consumer spending rose by slightly more than expected in February for the eighth straight month of gains.
But the Commerce Department figures also showed that inflation accelerated at its fastest pace since June 2009.
The department said spending rose 0.7% after an upwardly revised 0.3% gain in January. Economists had expected a 0.6% rise.
Spending adjusted for inflation increased 0.3% last month after being flat in January.
After increasing at its fastest pace in four years in the final three months of 2010, US consumer spending is expected to slow in the first quarter, with rising energy and food prices stealing from spending on other goods and services.
High food and energy prices pushed up overall inflation last month. The Commerce Department said the personal consumption expenditures price (PCE) index rose 0.4%, the fastest since June 2009, after gaining 0.3% in January
The Federal Reserve's preferred measure of consumer inflation - the core PCE index excluding food and energy - increased 0.2% after rising by the same margin in January.
The Federal Reserve so far views the high food and energy prices as short-term, but chairman Ben Bernanke said he would act to ensure an inflationary psychology does not take root.
Incomes rose 0.3% last month after rising 1.2% in January. That compared with economists' expectations for a 0.4% gain.
With consumption outpacing the growth in incomes, savings fell to $676.7 billion from $710.5 billion in January.
