Stalled US Spending Gives Fed More Room to Hold Interest Rates Steady

US consumer spending has stalled in July, according to data released by the Bureau of Economic Analysis. The inflation-adjusted consumer spending was flat last month, following strong increases in May and June. This slowdown may give the Federal Reserve more room to hold interest rates steady.

The personal consumption expenditures price index rose 0.2% in July from a month earlier, while the core PCE index, which excludes food and energy items, also advanced 0.2%. The core PCE index has increased 3.3% from a year earlier.