US Consumer Spending Drops in May, Price Pressures Remain Muted

US consumer spending declined in May by the most since the start of the year, indicating elevated uncertainty around the Trump administration’s economic policies is increasingly weighing on the outlook for growth.

Personal consumption expenditures fell 0.3% after adjusting for inflation, according to Bureau of Economic Analysis figures published Friday. The Federal Reserve’s preferred inflation gauge, the PCE price index minus food and energy, rose 0.2% — slightly more than expected, though still consistent with limited price pressures.

The decline in spending, which was broad-based, coincides with depressed consumer sentiment this year in response to President Donald ...