Consumer spending in the U.S. saw a marginal increase in April, as households chose to focus on saving amidst economic uncertainty caused by ongoing tariff changes.
Inflation was tame in April, with underlying price pressures showing the smallest annual increase in four years.
The big picture: Consumer spending rose by 0.2% in April, with services like housing, healthcare, and hospitality driving this increase.
- However, spending on goods decreased due to cutbacks in areas such as vehicle purchases, clothing, and recreation.
- Preemptive buying ahead of tariff implementations had initially boosted spending but declined as tariff deadlines approached.
Go deeper: Concerns over the impact of trade policies on economic growth and inflation led to caution among Federal Reserve officials.
- Core inflation, excluding food and energy, saw modest rises but remained within the Fed’s target range.
