US Consumer Spending Stalls in July as PCE Inflation Holds at 3.7%
Updated
Updated · CNN · Aug 26
US Consumer Spending Stalls in July as PCE Inflation Holds at 3.7%
3 articles · Updated · CNN · Aug 26
Summary
Inflation-adjusted US consumer spending was flat in July after a 0.4% gain in June, signaling a sharp loss of momentum in household demand.
The Fed’s preferred PCE inflation gauge rose 0.2% on the month and held at 3.7% annually, above forecasts for 0.1% monthly growth and a 3.6% yearly rate.
A 3% saving rate and a 0.4% rise in after-tax income helped cushion households, even as inflation has recently outpaced wage growth.
Services drove the nominal 0.2% spending increase, while goods purchases fell in categories including gasoline, vehicles and home furnishings; Amazon’s earlier Prime Day likely pulled some demand into June.
The July slowdown adds to signs consumers may be turning more cautious as energy costs, a softer labor market and years of elevated inflation weigh on spending.