This decrease can be attributed partly to an unusually cold climate, but also reflects greater caution by consumers in the face of economic uncertainty.
The American consumers They significantly reduced their expense in January, marking the greatest decrease since February 2021. This behavior occurs in a context of decreasing inflation, although the threats of new tariffs by the White House could interrupt this progress.
Consumer spending fell 0.2% in January compared to the previous month, according to the Department of Commerce. This decrease can be attributed partly to an unusually cold climate, but also reflects greater caution by consumers in the face of economic uncertainty.
Inflation and income increase
Inflation slowed 2.5% in January compared to the previous year, and basic prices, excluding food and energy, fell to 2.6%, the lowest level since June. In addition, income increased 0.9% in January, driven by an annual adjustment in Social Security payments.
Concerns for new tariffs
Despite these positive indicators, the threat of new tariffs by President Donald Trump generates uncertainty. Trump has announced the duplication of tariffs on Chinese imports at 20% and the imposition of 25% tariffs on Canada and Mexico from next Tuesday. These measures could raise prices and decelerate the economy.
Impact on consumer trust
Consumer confidence has been affected by the possibility of a price increase due to tariffs. American consumers and companies fear that these measures will cause an inflationary spiral, where higher price expectations lead to a real increase in inflation.
Economic perspectives
Uncertainty about commercial, fiscal and regulatory policies is overshadowing economic perspectives. The Federal Reserve observes these developments, since price increases could maintain inflation above its objective. The Fed pays special attention to basic prices, which offer a better reading of future inflation.
This scenario raises significant challenges for the US economy, where the combination of tariffs and inflationary expectations could complicate economic stability in the coming months.
Source: Ambito
