US consumer spending and income fell in May, the Bureau of Economic Analysis reported on Friday. Inflation also ticked up, based on core PCE. This measure of inflation, which is the Fed’s preferred benchmark for monitoring prices, edged up to a 2.7% year-over-year rate. “The report is a wash for the Fed and won’t alter its wait-and-see stance,” said Sal Guatieri, a senior economist at BMO Capital Markets. “The pullback in spending in May partly reflects payback from earlier tariff front-running, while the slightly warmer core price increase doesn’t settle the debate about how much tariffs will impact inflation.”
