Americans pulled back on their spending in April amid tariff rollout
American consumers reined in their spending in April following a tariff-fueled buying binge the month before, according to new data released Friday that also showed inflation cooled off again.
Friday's report from the Commerce Department showed that consumer spending rose 0.2% last month, a weaker-than-anticipated reading but a notable retreat from March's 0.7% surge when Americans front-loaded purchases — notably new cars — ahead of potential price increases from President Donald Trump's tariffs.
The latest data also showed inflation moving closer to the Federal Reserve's target of 2%, almost where it was before the tariffs rollout.
The Personal Consumption Expenditures price index was 2.1% for the 12 months ended in April, a slowdown from the 2.3% annual gain in March. On a monthly basis, prices rose 0.1%, a slight acceleration after holding steady in March.
Economists were expecting the PCE price index to rise 0.2% from March and to ease to an annual rate of 2.2%, and for spending to slow to 0.4%, according to FactSet.
This story is developing and will be updated.
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