Inflation Cools, Consumer Spending Plummets as Fed Considers Rate Hike

Inflation in the US cooled down to 3.4% in July from a year ago, but consumer spending slowed significantly as well, according to recent data.

According to the Labor Department, consumer prices rose just 0.1% from June to July, which is the smallest monthly increase since May last year.

This comes at a time when the Federal Reserve is considering whether to hike interest rates to combat inflation. However, the Fed's decision was sharply divided, with three dissenters favoring a rate hike.

Meanwhile, retail sales dropped 0.6% in July as consumers cut back on spending after a boost from government tax refunds faded.