Consumer spending in the United States rose in February but fell short of economists’ expectations, as households cut back on dining and travel while grappling with rising costs and economic uncertainty.
Figures released by the US Commerce Department’s Bureau of Economic Analysis showed that consumer spending climbed by 0.4 per cent last month. This followed a downwardly revised 0.3 per cent decline in January and was slightly below economists’ expectations of a 0.5 per cent rebound.
The data suggests that American households remain cautious about non-essential purchases. Spending on restaurants, hotels and motels dropped sharply by 15 per cent, while expenditure at non-profit institutions also slumped by 15.8 per cent — likely impacted by federal funding cuts as President Trump moves to shrink government spending.
However, the overall picture was supported by stronger sales of durable goods, including motor vehicles, furniture, and household equipment. Non-durable goods such as food and beverages also saw a modest rise, while services spending edged up 0.2 per cent.
The weaker-than-expected rebound in spending comes amid mounting pressure on US households from rising prices and concerns over the economic outlook. Economists are increasingly warning that a series of tariffs imposed by President Trump could push inflation higher, particularly on imported goods.
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