WASHINGTON: U.S. consumer spending increased solidly in July while underlying inflation picked up as tariffs on imports raised prices of some goods, but that data will probably not prevent the Federal Reserve from cutting interest rates next month against the backdrop of softening labor market conditions.
Consumer spending, which accounts for more than two-thirds of economic activity, rose 0.5% last month after an upwardly revised 0.4% gain in June, the Commerce Department's Bureau of Economic Analysis said on Friday. Economists polled by Reuters had forecast spending would rise 0.5% after a previously reported 0.3% advance in June.
