Jin10 Data, June 27 - U.S. consumer spending unexpectedly fell in May as the boost from pre-tariff purchases diminished and inflation remained moderate. Data released on Friday showed that consumer spending, which accounts for more than two-thirds of economic activity, declined by 0.1% last month, while the market had expected a rise of 0.1%. After the surge in pre-shopping faded, consumer spending nearly stagnated in the last quarter. Service spending also decreased, leading to a quarterly increase in consumer spending of only 0.5%, the lowest since the second quarter of 2020. This data indicates a weak consumption growth trajectory for the second quarter. The combination of weak consumption and moderate inflation is still not enough to prompt the Federal Reserve (FED) to restart rate cuts in July. Economists point out that the current moderate inflation is due to businesses still holding onto inventory accumulated before the tariffs took effect, and inflation is expected to rise starting from the June CPI data.
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U.S. consumer spending unexpectedly declined in May, while inflation rose moderately.
Jin10 Data, June 27 - U.S. consumer spending unexpectedly fell in May as the boost from pre-tariff purchases diminished and inflation remained moderate. Data released on Friday showed that consumer spending, which accounts for more than two-thirds of economic activity, declined by 0.1% last month, while the market had expected a rise of 0.1%. After the surge in pre-shopping faded, consumer spending nearly stagnated in the last quarter. Service spending also decreased, leading to a quarterly increase in consumer spending of only 0.5%, the lowest since the second quarter of 2020. This data indicates a weak consumption growth trajectory for the second quarter. The combination of weak consumption and moderate inflation is still not enough to prompt the Federal Reserve (FED) to restart rate cuts in July. Economists point out that the current moderate inflation is due to businesses still holding onto inventory accumulated before the tariffs took effect, and inflation is expected to rise starting from the June CPI data.