Moderate Consumer Spending Growth Signals Economic Slowdown

U.S. consumer spending grew slightly in September, indicating a potential economic slowdown as high inflation and a stagnant labor market weigh on demand. The Commerce Department reported annual inflation reaching its fastest pace in 1.5 years, with President Trump criticized for raising prices through tariffs.

Consumer spending in the United States experienced moderate growth in September after three consecutive robust months, signaling a potential deceleration in economic momentum as the third quarter drew to a close. The slowdown is attributed to a lackluster labor market and rising costs, which have dampened consumer demand. The Commerce Department's recent report also highlighted an uptick in annual inflation, which reached its quickest pace in nearly a year and a half.

The impact of President Donald Trump's tariffs on imported goods has gradually increased consumer prices, a point of contention for Americans frustrated by high inflation levels. This discontent is reflected in a recent dip in Trump's approval ratings. According to a University of Michigan survey, households have an increasingly somber outlook, citing the persistent burden of elevated prices.

Despite the challenges, consumer spending, which constitutes more than two-thirds of U.S. economic activity, rose by 0.3% in September after a downward revision of 0.5% in August, as per the Bureau of Economic Analysis. The increase primarily reflected higher prices, particularly in energy sectors. Meanwhile, spending on various goods, including motor vehicles and clothing, showed little to no growth.

(With inputs from agencies.)