U.S. Consumer Spending Jumps $156 Billion in May as Inflation Hits 4.1%
Updated
Updated · The Washington Post · Jun 25
U.S. Consumer Spending Jumps $156 Billion in May as Inflation Hits 4.1%
3 articles · Updated · The Washington Post · Jun 25
Summary
$156 billion in added May spending showed Americans kept buying despite the fastest price increases in three years, according to Bureau of Economic Analysis data.
4.1% annual inflation on the Fed’s preferred price gauge — 3.4% excluding food and energy — lifted bills for essentials, while services such as housing and health care also rose.
A resilient labor market, slightly easing energy prices and larger-than-normal tax refunds helped households keep spending beyond necessities rather than cutting back elsewhere.
Higher-income households are still driving much of the gain in a K-shaped economy, though analysts said middle- and lower-income consumers also got support from bigger refunds.
June consumer sentiment improved from May and economists expect summer travel and World Cup-related activity to keep spending firm, even if confidence remains below year-ago levels.