Inflation slowed sharply in March, moving closer to the Federal Reserve’s 2% target, while tariff-induced consumer spending continued to fuel the economy.

U.S. consumer spending increased solidly in March as households boosted purchases of motor vehicles to avoid higher prices and shortages due to tariffs, but that did little to change economists' views that the economy had shifted into lower gear.

Consumer sentiment is souring, and recession fears are rising, but spending in the US is on the rise as consumers and businesses are likely buying now to lessen the expected impact of President Donald Trump's tariffs. Durable goods spending increased about 2.3% from the third quarter of 2024 to $2.218 trillion in the first quarter of 2025.