Washington Post: Consumer Spending Continues to Slow 

Consumers are pulling back on large purchases and setting aside more money in savings. 

June 03, 2025

Consumer spending growth, which was already sluggish, slowed significantly in April as consumers waited to see how tariff-related uncertainty might play out, reported the Washington Post. According to data from the Bureau of Economic Analysis, spending rose 0.2% in April, a drop from the 0.7% increase the month prior.

“Americans spent more on services like housing, utilities and health care, but they pulled back sharply on cars, clothing and appliances. Families are also saving more, setting aside 4.9% of their incomes, compared with 4.3% in March,” the Post wrote.

“The markets are already nervous about trade tariff headlines and now there are new worrying signs the real economy is taking a hit,” Chris Rupkey, chief economist at Fwdbonds, a financial research firm, wrote in a note to clients. “Just as you’d expect, consumers stayed away from the purchase of durable goods like clothing and cars and instead spent mostly on life’s necessities like housing, health care and food services. This is a trade war report where the consumer is clearly gun-shy.”

While the broader economy remains largely stable with unemployment at 4.2% and inflation coming down from recent peaks, economists say that the slowdown in consumer spending—which drives nearly 70% of GDP—is an early warning sign that tariff-related anxiety could spill over into other parts of the economy.

Last week, a federal trade court struck down most of the Trump administration’s sweeping new tariffs, including a 10% blanket tax on all imports and a 25% tax on goods from Canada and Mexico. But an appeals court temporarily paused the court order, reinstating tariffs and allowing the government to continue collecting taxes on nearly all imports.

According to CNN, economists weren’t expecting the early wave of import duties to have an immediate effect on prices nor on the April inflation data.

“We’re looking at very backwards-looking data; we’re looking into April, and it’s hard to say (to what extent) the total effects of the tariffs have come through,” Dan North, senior economist at Allianz Trade US, said in an interview with CNN. “I think there’s a reasonable case to be made that each report is not going to be quite so rosy as this.”