US consumer spending growth slows while inflation remains soft
[WASHINGTON] US consumers hit the brakes in April after the strongest month of spending since early 2023 while inflation remained tame, consistent with a slowing economy.
Inflation-adjusted personal spending rose 0.1 per cent after rising 0.7 per cent a month earlier, Bureau of Economic Analysis data showed Friday.
The personal consumption expenditures price index, excluding food and energy, increased 0.1 per cent from a month earlier. Compared with a year earlier, the so-called core inflation gauge rose 2.5 per cent from April 2024 – the smallest annual advance in more than four years.
The figures illustrate an undercurrent of anxiety among many American consumers about the economy after the weakest quarter for spending in nearly two years. While higher duties on imports have yet to show up more broadly in higher goods prices, sentiment has slumped and the outlook for personal finances stands at a record low.
The modest rise in spending reflected an increase in services that more than offset a decline in durable goods outlays.
At the same time, the Trump administration has walked back or paused some tariffs as negotiators work toward trade deals with key partners including China and the European Union. On Wednesday, a US court issued a ruling that blocks many of the import taxes.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
Separate data out Friday showed a massive narrowing of the US merchandise-trade deficit in April on the largest-ever decrease in imports.
The constant state of flux in trade policy has nonetheless fuelled uncertainty, with consumers' spending attitudes hanging in the balance. Meanwhile, Federal Reserve policymakers will likely keep interest rates unchanged for the foreseeable future until they get more clarity on the impact of tariffs not only on prices but also on other pillars of the economy like the labour market and consumer spending.
Economists are paying close attention to the degree to which companies are passing through higher import duties to consumers. A measure of goods inflation that excludes food and energy climbed 0.3 per cent.
While many companies have so far been absorbing or offsetting much of the hit from tariffs, retailers including Walmart and Macy's Inc have indicated Americans will start seeing price hikes soon. BLOOMBERG
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
3 hours ago
- Straits Times
Germany's Merz heads to US for talks on Ukraine, trade, Middle East
German Chancellor Friedrich Merz will meet US President Donald Trump at the White House on June 5. PHOTO: REUTERS Germany's Merz heads to US for talks on Ukraine, trade, Middle East BERLIN - Germany's Chancellor Friedrich Merz will on June 5 meet US President Donald Trump for talks at the White House with the Ukraine and Middle East conflicts, as well as rocky trade relations, on the agenda. The talks will focus on relations between the two countries, German government spokesman Stefan Kornelius said on May 31, as well as 'the Russian war of aggression against Ukraine, the situation in the Middle East and trade policy'. The talks will be the first time the two leaders have met and mark Mr Merz's first official visit as Germany's new Chancellor. Mr Trump has rattled Europe with shifts in security and trade policy since returning to the White House, including an array of tariffs on European partners. Speaking at the WDR Europaforum conference on May 26, Mr Merz said the European Union could retaliate with measures against US technology companies or other tariffs if the transatlantic trade conflict escalates. 'We shouldn't react heedlessly and hectically,' Mr Merz said. 'But if we can't do anything else, we would need to use this tool.' At the same time, Mr Merz's government, which last week said it would help Kyiv develop long-range missiles, wants to make sure that Washington will not walk away from Ukraine whilst it is at war with Russia. Mr Merz and Mr Trump have already had several telephone conversations, with the two earlier in May agreeing to visit each other, without giving dates. AFP Join ST's Telegram channel and get the latest breaking news delivered to you.
Straits Times
5 hours ago
- Straits Times
Saudi Arabia to provide financial support with Qatar to Syria's state employees, Saudi foreign minister says
Saudi Foreign Minister Prince Faisal bin Farhan Al Saud attends a press conference with Syrian Foreign Minister Asaad Hassan al-Shibani (not pictured), in Damascus, Syria May 31, 2025. REUTERS/Yamam Al Shaar Saudi Arabia to provide financial support with Qatar to Syria's state employees, Saudi foreign minister says CAIRO - Saudi Arabia's Foreign Minister Prince Faisal bin Farhan Al-Saud said on Saturday that the kingdom will jointly offer with Qatar financial support to state employees in Syria. "The kingdom will provide with Qatar joint financial support to state employees in Syria," Bin Farhan said during a press conference with his Syrian counterpart Asaad al-Shibani in Damascus. He did not provide details on the size of the financial support to be provided by Riyadh and Doha. However, it echoes a similar move by Qatar to bankroll Syria's public sector. His visit comes few weeks after the U.S. made a surprise announcement on lifting sanctions on Syria's Islamist-led government which overthrew former leader Bashar al-Assad in December. U.S. President Donald Trump made the decision during his recent visit to the Middle East and said it was at the behest of Saudi Arabia's crown prince, whose country was a main advocate for the lifting of sanctions. The European Union also recently lifted economic sanctions on Syria. Bin Farhan referred to his country's role in helping to lift economic sanctions on Syria, saying that Saudi Arabia would continue to be one of the main backers to Syria in its path for reconstruction and economic recovery. He said he was being accompanied with a high-level economic delegation from the kingdom to "hold talks [with the Syrian side] to bolster aspects of cooperation in various fields". Several visits would then follow in the coming days by Saudi businessmen to Syria to discuss investments in energy, agriculture, infrastructure and other sectors, he said. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Straits Times
10 hours ago
- Straits Times
China bans all poultry imports from Brazil on bird flu case
The sweeping ban from China clouds the outlook for exports from Brazil. PHOTO: REUTERS China bans all poultry imports from Brazil on bird flu case China has banned imports of all poultry products from Brazil after a bird flu outbreak was detected in the world's top exporter, halting a trade worth more than US$1 billion (S$1.29 billion). Direct and indirect imports of all poultry and related products from Brazil are banned in order to prevent the importation of bird flu, China's customs agency said in a statement published on May 30. The agency also said all plants and animal waste arriving from Brazil must undergo disinfestation. The sweeping ban from China, the largest buyer of Brazilian chicken meat, clouds the outlook for exports from the South American country. That comes even as the two nations work to bolster relations amid the ongoing global trade war launched by US President Donald Trump. Earlier this month, Brazil halted chicken shipments to China and the European Union for 60 days after the first case of highly pathogenic avian influenza was reported on a commercial farm in the South American nation. Brazil, responsible for about a third of the world's chicken meat exports, shipped more than 10 per cent of its products to China in 2024, according to data from the Department of Agriculture. The bilateral trade was worth about US$1.5 billion in 2024, according to China customs data. BLOOMBERG Join ST's Telegram channel and get the latest breaking news delivered to you.
