U.S. inflation-adjusted consumer spending fell last month by the most since February, suggesting that Americans tempered their outlays amid the latest Covid-19 wave and the fastest inflation in nearly 40 years.

Purchases of goods and services, adjusted for changes in prices, decreased 1% from November, the Commerce Department said Friday.

The personal consumption expenditures price gauge, which the Federal Reserve uses for its inflation target, rose 0.4% from a month earlier and 5.8% from December 2020, the most since 1982. Unadjusted for inflation, spending fell 0.6%, while incomes rose 0.3%.

In another sign of inflation pressures throughout the economy, a separate Labor Department report Friday showed U.S. employment costs rose at a robust pace for a second straight quarter, highlighting the rapid compensation gains seen in the second half of the year as businesses competed for a limited supply of workers.

The data come after the Fed, seeking to tame inflation and preserve the recovery, endorsed interest-rate liftoff in March and opened the door to more frequent and potentially larger hikes than anticipated following its two-day policy meeting on Wednesday.

A surge in coronavirus infections due to the omicron variant likely slowed spending in December as more Americans stayed home, and high prices were probably also a deterring factor. That impact could carry over to the beginning of the first quarter as economic activity remains subdued, though most analysts expect the slowdown to be short-lived.

"There's a risk that the high inflation we're seeing will be prolonged, there's a risk that it will move even higher," Chair Jerome Powell said during a press conference Wednesday. "We have to be in a position with our monetary policy to address all of those plausible outcomes."

The median forecasts in a Bloomberg survey of economists called for a 1.1% decrease in inflation-adjusted spending and a 5.8% rise in the price index from a year ago.

A separate report Thursday showed personal spending grew 3.3% in the final three months of 2021, led by a pickup in services outlays. Friday's data for December suggest that consumer outlays were concentrated in the earlier part of the fourth quarter.

Inflation-adjusted goods expenditures slumped 3.1%, while spending on services rose 0.1%, according to Friday's data.

The report also showed that personal incomes increased in December by a slower pace than 0.5% in the prior month.

The saving rate — or personal saving as a share of disposable income — rose to 7.9%, the second straight increase after declining for much of the year.

Wages and salaries advanced 0.7% in December after an 0.6% increase in the prior month as companies continue to raise pay to attract workers amid low labor supply.

Despite sizable pay increases on nominal terms, inflation is eating away at incomes. Disposable personal income, or after-tax income adjusted for inflation, fell 0.2% last month, the fifth straight decline.

The core price index, which excludes food and energy, rose 4.9% from a year ago, the most since 1983. Price pressures are expected to remain elevated in the coming months before cooling later this year.

Olivia Rockeman reports for Bloomberg News.

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