Us Consumer Spending Falls as Inflation Rises
U.S. consumer spending unexpectedly fell in January, dropping 0.2% last month after an upwardly revised 0.8% increase in December. A pick-up in inflation could provide cover for the Federal Reserve to delay cutting interest rates for some time. The economy's slowdown, fueled by fading front-running gains and winter storms, is consistent with expectations for a sluggish economic growth rate in the first quarter.
- The decline in consumer spending highlights the vulnerability of the U.S. economy to external shocks, such as weather events and trade policies, which can have far-reaching impacts on business confidence and investment decisions.
- How will the ongoing inflationary pressures, fueled by President Trump's tariffs and spending cuts, influence the trajectory of monetary policy and the overall health of the U.S. consumer market?