Consumer spending increased despite higher inflation
Consumers spent 0.5% more in July than in June, even as prices rose, according to data from the Commerce Department released on Friday.
That increase was expected, and it was driven in part by spending on cars and vehicle parts. Personal incomes also increased in July, rising 0.4%.
At the same time, though, the Federal Reserve's preferred measure of inflation, the personal consumption expenditure index, showed that in July, prices grew 2.9%, excluding food and energy. This is a higher reading than the central bank's target 2% inflation.
Taken together, the report is the latest piece of evidence that the Fed is likely to cut interest rates at its next meeting in September.
Online orders could get pricier as tariff exemption ends
A law that had exempted certain shipments from tariffs ended Friday, and experts say consumers and small businesses should be prepared to see higher prices.
Known as the "de minimis" exemption, the rule allows items worth less than $800 to be shipped to the United States without having to pay any tariffs.
In May, the White House rolled back the law — which it has called a "catastrophic loophole" that's been used to avoid tariffs and bring unsafe products into the U.S. — for goods from China and Hong Kong. At the end of July, that action was expanded to all imports.
Ahead of Friday, some foreign postal services had already paused shipments to the U.S. as they worked to process the new rule. Retail insiders have warned that the change could leave consumers waiting longer and paying more for online orders.
Second criminal referral filed against Federal Reserve governor
Federal Housing Director Bill Pulte filed a second criminal referral against Federal Reserve governor Lisa Cook with the Justice Department, intensifying the Trump administration’s campaign to remove her from the board.
In a post on X, Pulte said the new referral, in a letter to U.S. Attorney General Pamela Bondi dated Aug. 28, involves a mortgage for a condo in Cambridge, Massachusetts. He alleged Cook told the bank it was a “second home” to get a loan but later reported it as an investment rental property in a government ethics form.
Pulte also asserted that Cook had misrepresented the status of two other homes — claiming her Atlanta home as her residence while renting it out, and calling an Ann Arbor, Michigan, property her personal residence despite it being used as a rental property, according to the referral.
This claim comes after Cook sued President Donald Trump on Thursday over his attempt to remove her, escalating a legal battle around the central bank’s independence.
The White House said on Thursday that the president had exercised his “lawful authority” to remove a governor from the Federal Reserve, saying “there was cause to remove a governor who was credibly accused of lying in financial documents from a highly sensitive position overseeing financial institutions.”
Cook’s legal team told Homes.com that “this is an obvious smear campaign aimed at discrediting Gov. Cook by a political operative who has taken to social media more than 30 times in the last two days and demanded her removal before any review of the facts or evidence.”
Her legal counsel was in federal court on Friday to block Trump’s attempt to remove her from the Federal Reserve. The legal hearing took over two hours and concluded with no immediate ruling. Judge Jia Cobb gave both parties a chance to file additional arguments by Tuesday.
