rose 0.3% from May<\/a>, when spending was flat, according to Commerce Department data released Thursday. Adjusted for inflation, spending ticked up 0.1%.\n <\/p>\n\n The report \u2014 which provides a comprehensive look on how prices are changing as well as how households\u2019 income, spending and savings are faring \u2014 showed that inflation picked up as well last month.\n <\/p>\n
\n The Personal Consumption Expenditures price index \u2014 the inflation gauge the Federal Reserve uses for its 2% target rate \u2014 rose 0.3% on a monthly basis, which lifted the annual rate to 2.6%, the highest since February.\n <\/p>\n
\n Tariffs are starting to leave a bigger mark on overall inflation; however, consumers, whose spending powers more than two-thirds of economic activity, are largely \u201cholding up OK,\u201d Gus Faucher, chief economist of The PNC Financial Services Group, told CNN in an interview.\n <\/p>\n
\n Personal income rose 0.3% in June and the savings rate held steady at 4.5%, Thursday\u2019s report showed.\n <\/p>\n
\n \u201cI think we\u2019re seeing modest growth in consumer spending,\u201d he said. \u201cThe economy has definitely downshifted over the past year; we\u2019re seeing slower job growth, slower income growth and along with that is coming slower consumer spending growth.\u201d\n <\/p>\n
\n \u201cYou add on top of that, tariffs \u2014 both the price increases and the uncertainty that\u2019s created \u2014 and consumers have turned a bit more cautious,\u201d he added.\n <\/p>\n
\n Economists were expecting PCE to rise 0.3% from 0.2% in May and accelerate on an annual basis to 2.5% from the initially reported 2.3% increase (May\u2019s annual inflation rate was revised upward to 2.4% in Thursday\u2019s report).\n <\/p>\n
\n Excluding energy and food, which tend to be quite volatile, the \u201ccore\u201d PCE index showed price hikes picked up speed in June, rising 0.3% from May (the fastest gain in four months), and holding at an annual rate of 2.8%\n <\/p>\n
\n The PCE price index was expected to heat up slightly in part because of rising gas prices, which had been falling for much of the year, as well as pricier goods from businesses passing along tariff-related costs to consumers.\n <\/p>\n
\n That was indeed the case, according to Thursday\u2019s report: Energy prices shot up 0.9% after falling 1% the month before. Goods prices rose 0.4% (durable up 0.5%, non-durable goods up 0.4%), marking the highest monthly rate since January when prices bumped higher after holiday season discounts.\n <\/p>\n
\n \u201cDurable goods prices were up a half of a percent,\u201d Faucher said. \u201cThese things can bounce around form month to month, and I don\u2019t want to read too much into everything; but, certainly, that\u2019s suggestive of tariff costs being passed along to consumers, and I think we\u2019re going to see more of that over the next few months.\u201d\n <\/p>\n
\n President Donald Trump\u2019s trade policies, which include widespread (but highly volatile) tariffs on imported goods from countries around the world, are starting to result in higher prices for consumers as well as elevated inflation rates.\n <\/p>\n
\n The tariffs are paid by the companies that import the goods<\/a>, but then those price increases are often spread out through the supply chain and, oftentimes, passed onto consumers in some form.\n <\/p>\n\n And while the higher tariffs aren\u2019t expected to trigger an inflationary surge like Americans saw in 2022, the price hikes won\u2019t be easy for everyone, Faucher said.\n <\/p>\n
\n \u201cIt\u2019s going to be uncomfortable for consumers,\u201d he said. \u201cI think that they\u2019re going to start to see it, and they\u2019re going to notice that their paychecks aren\u2019t going as far as they were.\u201d\n <\/p>\n
\n Stock futures were relatively unchanged after the latest spending and inflation data. Dow futures were up 100 points, or 0.23%. S&P 500 futures rose 0.92% and Nasdaq 100 futures gained 1.33%.\n <\/p>\n
\n This story has been updated with additional developments and context.\n <\/p>\n","protected":false},"excerpt":{"rendered":"Facebook Tweet Email Link US consumers continued to spend in June, powering the economy in the process, despite…\n","protected":false},"author":2,"featured_media":36032,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,56,54,55],"class_list":["post-36031","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/36031","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=36031"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/36031\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/36032"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=36031"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=36031"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=36031"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}