Consumer Spending Declines Despite Inflation Drop

WASHINGTON — A significant economic indicator showed a decrease last month, suggesting that inflation might be starting to ease, though potential new tariffs from the White House could impede this progress.

According to the Commerce Department’s report on Friday, consumer spending in the U.S. saw a slight decline of 0.2% in January from December’s figures. This dip could be attributed to the unusually cold weather, but it may also indicate a broader hesitancy among consumers, reflecting anxieties over the current economic landscape.

The data also revealed that inflation fell to 2.5% in January compared to the previous year, slightly down from 2.6% in December. Meanwhile, core prices, which exclude the more erratic food and energy sectors, dropped to 2.6% from 2.8%, marking the lowest point since June.

Inflation surged to its highest point in four decades during 2022, which played a critical role in Donald Trump’s presidential victory and prompted the Federal Reserve to aggressively hike interest rates in an effort to control rising prices.