US spending misses target due to drop in gasoline prices, inflation eases

Slowdown in inflation likely to be welcomed by Fed officials

US consumer spending barely rose in July as a drop in gasoline prices weighed on receipts at service stations, but monthly inflation slowed down considerably, which could give the Federal Reserve room to scale back its aggressive interest rate hikes.

Though the report from the Commerce Department on Friday showed a modest gain in personal income last month, wages increased strongly, which could help to underpin consumer spending and keep the economy growing, though moderately.

The slowdown in inflation is likely to be welcomed by Fed officials. Fed Chair Jerome Powell is due on Friday to address the annual Jackson