The latest BEA report shows a 0.3% rise in the PCE Price Index, indicating easing inflation, though core inflation remains above 2.5%. Personal income grew by 0.9%, but consumer spending declined, signaling economic caution. The Federal Reserve faces challenges in adjusting interest rates to balance inflation and growth.
With consumer spending driving 70% of the economy, further declines could slow business growth and job creation. The Trump administration highlights inflation control as a success ahead of the 2026 elections, while critics point to ongoing economic concerns. The Fed’s next moves will be crucial in shaping the economic outlook.