Growth in U.S. consumer spending slowed in July to a modest increase of 0.3% as infections from the delta variant spread, while inflation over the past 12 months hit its fastest pace in three decades, the Associated Press reported. Last month’s spending was not even a third of the 1.1% rise in June, the Commerce Department reported on Friday. It was the clearest signal yet that the surge in the delta variant of the coronavirus has had an impact on consumer spending, the driving force in the economy. Consumer prices over the past 12 months have risen 4.2%, the biggest 12-month gain since a 4.5% increase for the 12 months ending in January 1991. This price index tied to consumer spending is the inflation gauge preferred by the Federal Reserve. The 4.2% increase over the past year is well above the Fed’s annual inflation target of 2% but so far Fed officials view the jump in inflation as transitory and have not changed their easy-money policies in the belief that rising infections could become a threat to future growth.
