US consumer spending unexpectedly drops in May, inflation moderately rises

BlockBeats News: On June 27th, US consumer spending unexpectedly fell in May as the boost from early purchases before tariffs weakened and inflation remained moderate. Data on Friday showed that consumer spending, which accounts for over two-thirds of economic activity, decreased by 0.1% last month, while market expectations were for a 0.1% increase. After the trend of early shopping disappeared, consumer spending almost stagnated in the last quarter. The synchronous decrease in service expenditures resulted in a quarterly increase of only 0.5% in consumer spending, the lowest since the second quarter of 2020. This data indicates a weak consumption growth path in the second quarter. The combination of weak consumption and mild inflation is still not enough to prompt the Federal Reserve to restart interest rate cuts in July. Economists point out that the current moderate inflation is due to the inventory that companies are still hoarding before the sales tariffs take effect, and it is expected that inflation will start to rise from the June CPI data. (Golden Ten)