U.S. consumer spending unexpectedly fell in May, while inflation rose moderately
ChainCatcher news, according to Jinshi reports, U.S. consumer spending unexpectedly fell in May as the boost from pre-tariff purchases weakened, 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 growth of 0.1%. After the surge in pre-shopping faded, consumer spending nearly stagnated 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 path for the second quarter. The combination of weak consumption and moderate inflation is still insufficient to prompt the Federal Reserve to restart interest rate cuts in July. Economists point out that the current moderate inflation is due to companies still selling off inventories accumulated before the tariffs took effect, and inflation is expected to rise starting from the June CPI data.