US Consumer Spending and Inflation Rise as Growth Slows

US consumer spending rose 0.4 percent in January while core inflation hit 3.1 percent. Economic growth slowed to 0.7 percent as Middle East conflict persists.

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Consumer spending in the United States rose steadily in January, while underlying inflation pressures remained firm. These economic conditions, coupled with the geopolitical tensions involving Israel and Iran, have reinforced expectations that the Federal Reserve will postpone interest rate cuts until the third quarter of the year.

Pedestrians navigate the sidewalks of Fifth Avenue in New York City, United States, during the summer of 2025. REUTERS/Adam Gray
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