US Inflation Cools Off, Consumer Spending Surprisingly Falls

The US economy saw some mixed signals in recent economic data, with inflation cooling off in July but consumer spending unexpectedly falling. The Labor Department reported that consumer prices rose 3.4% from a year ago, down from 3.5% in June, while wholesale price inflation slowed to 4.7%. However, retail sales slipped 0.6% last month, the biggest drop since May 2025.

Experts are divided on whether this slowdown is a cause for concern or just a temporary blip. Some argue that the Iran war has had a limited impact on broader costs in the economy, while others warn that consumer prices have risen faster than wages for the past four months, underscoring the challenges many Americans face affording necessities.

On the housing market front, existing home sales fell 1.7% last month from June to a seasonally adjusted annual rate of 4.06 million units, while mortgage rates dipped slightly but remain steeper than they were a year ago.