Consumer spending rises even as tariff concerns grow and inflation speeds up

Even as consumers express concerns over rising prices from inflation and taxes, they’re still spending. 

U.S. retail and food services sales for June increased 0.6% from May, totaling $720.1 billion, according to advance estimates from the U.S. Census Bureau released Thursday. Sales for the month rose 3.9% over over the same time in 2024.

Even as President Donald Trump’s trade war threatens to raise prices, his new tax law makes huge cuts in funding to major industries and programs, and inflation persists, consumers are still spending at a higher rate in the last three months than they did last year. Retail and food sales from April through June increased 4.1% from the same time in 2024. 

Additionally, retail trade sales, the final sale to consumers for personal and household use, increased 0.6% from May, up 3.5% from the same time last year. Retailers without stores also saw an increase in sales of 4.5% from last year and “food service and drinking places” rose 6.6% from this time last year. 

However, these spending trends could see a shift in the coming months as consumers vow to tighten their budgets amid rising costs. Parents said they plan to pull back on spending for their kids back-to-school shopping during the popular retail season, according to a recent study from Deloitte. Prices for used cars are on the upswing, and Mexican tomatoes and office snacks could soon follow.

Consumers reported feeling slightly more confident about inflation in June, a Federal Reserve survey found — but actual inflation rates paint a different picture. Most recent inflation data showed that prices went up in June by 0.3% — triple May’s 0.1% pace and the largest monthly gain since January.