Americans continued to spend in July despite elevated inflation, according to Commerce Department data released Friday. Consumer spending rose 0.5% from June, slightly below expectations but stronger than June’s 0.4% increase. When adjusted for inflation, spending gained 0.3%, an improvement over the prior month.
July’s boost came largely from auto sales and financial services, with Amazon’s Prime Day and back-to-school shopping also providing momentum.
US household spending rose 0.5% for the month, the most in four months, while the so-called core personal consumption expenditures price index rose 0.3% from June and 2.9% from the prior year.
— Bloomberg TV (@BloombergTV) August 29, 2025
Michael McKee breaks down the data https://t.co/EXNnPu9Zso pic.twitter.com/p8mqJXYH91
Personal income grew by 0.4%, supported by higher wages, while the savings rate held steady at 4.4%. Analysts said Americans were willing to spend when deals appeared, even as inflation pressures remained.
The Fed’s preferred inflation gauge, the Personal Consumption Expenditures price index, rose 0.2% for the month and held at 2.6% annually. Core PCE, excluding food and energy, ticked up 0.3%, bringing the annual rate to 2.9%. Economists noted the resilience of consumers but cautioned that spending outpaced income for the first time since March.
US consumer spending rose in July by the most in four months, indicating resilient demand in the face of stubborn inflation https://t.co/EKfOeVJiTD
— Bloomberg (@business) August 29, 2025
