TechFlow, June 27 — According to Jinshi Data, U.S. consumer spending unexpectedly declined in May as the boost from advance purchases ahead of tariffs faded, while inflation remained moderately elevated. Data released Friday showed that consumer spending, which accounts for more than two-thirds of economic activity, dropped 0.1% last month, missing the market expectation of a 0.1% increase. Consumer spending nearly stalled in the previous quarter after the surge in advance buying dissipated. A simultaneous decline in service spending drove quarterly consumption growth to just 0.5%, the lowest since the second quarter of 2020. The data suggests weak consumer growth momentum in the second quarter. The combination of sluggish consumption and moderate inflation is still insufficient to prompt the Federal Reserve to restart rate cuts in July. Economists noted that current mild inflation stems from businesses still selling inventory stockpiled before tariffs took effect, and inflation is expected to begin rising starting with the June CPI data.
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