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  • Tariff Fears Drive Surge in US Consumer Spending as Inflation Cools

Tariff Fears Drive Surge in US Consumer Spending as Inflation Cools

US consumer spending surged in March as Americans scrambled to make purchases before Trump’s tariffs took effect.

Tariff Fears Drive Surge in US Consumer Spending as Inflation Cools

Consumer spending surged in March as Americans scrambled to make purchases before President Donald Trump’s sweeping tariffs took effect, even as overall inflation cooled, according to new data released Wednesday by the Commerce Department.


Consumer spending surged in March as Americans scrambled to make purchases before President Donald Trump’s sweeping tariffs took effect, even as overall inflation cooled, according to new data released Wednesday by the Commerce Department, as reported by CNN.

According to the report, the Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred inflation gauge, rose 2.3% year-over-year in March, a notable drop from February’s 2.7%. On a monthly basis, prices were flat, compared to a 0.4% rise the month before, the report said, adding that the energy costs fell by 2.7% in March.

However, food prices surged 0.5%, marking the largest monthly increase in months.

Excluding volatile food and energy categories, core inflation remained flat for the month and slowed to 2.6% annually, down from 3% in February.

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What caught analysts by surprise, however, was a sharp rise in consumer spending, which jumped 0.7% from February, a massive leap from the prior month’s 0.1% increase, per CNN.

According to the report, it was the biggest monthly spike in spending in over two years, with government data indicating the surge was largely driven by households attempting to get ahead of Trump’s new tariff policies.

Meanwhile, GDP contracted by 0.3% in the first quarter — the worst performance since 2022. And a separate report on private-sector hiring showed a steep decline in job growth, indicating that employers are growing wary amid shifting federal policy and trade disruptions.

ALSO READ: US Economy Shrinks Sharply as Trump’s Tariff Moves Rattle Markets


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