American consumers began to "tap the brakes" in April, and the US Federal Reserve's favorite inflation indicator remained moderate.

In April, American consumers began to "tap the brakes" while inflation remained mild, consistent with the trend of economic slowdown. Data released by the US Bureau of Economic Analysis on Friday showed that after adjusting for inflation factors, personal spending in April increased by 0.1%, down from 0.7% the previous month. Meanwhile, the inflation index favored by the Federal Reserve remained mild. The core Personal Consumption Expenditures (PCE) Price Index, which excludes food and energy, rose by 0.1% month-on-month and 2.5% year-on-year, the smallest annual increase in over four years. Another set of data released on Friday showed that imports dropped nearly 20%, leading to a significant narrowing of the US trade deficit in goods in April. These data suggest that after experiencing the weakest quarter of spending in nearly two years, many American consumers are anxious about the economy. Although the increase in import tariffs has not yet been more broadly reflected in rising commodity prices, consumer confidence has plummeted significantly, and personal financial confidence is also at a historic low. Meanwhile, the Trump administration has withdrawn or suspended some tariffs. On Wednesday, a US court ruled that many of Trump's import tariffs are illegal. Nevertheless, the constantly changing trade policies have intensified uncertainty, making the outlook for consumer spending unclear. In addition, Federal Reserve policymakers may keep interest rates unchanged in the foreseeable future until they have a clearer understanding of the impact of tariffs on prices, the labor market, and consumer spending, among other economic pillars. Economists are closely monitoring the extent to which companies pass on higher import tariffs to consumers. A measure of non-food and energy inflation in goods rose by 0.3%. Although many companies have so far absorbed or offset much of the impact of tariffs, retailers like Walmart and Macy's have indicated that Americans will soon start to see price increases.