People still spend technology despite red flags in the July report

American consumers continued to open their portfolios in July, a new study by the Bureau of Economic Analysis showed on Friday, highlighting the resilience of household demand, even if inflation took place above the objective of the federal reserve.

This does not mean that they did not grimacted by doing so.

The favorite inflation gauge of the federal reserve, the price for personal consumer expenditure index increased by 0.2% over the month and 2.6% compared to the previous year.

The basic measurement, which withdraws food and energy, increased by 0.3% compared to June and 2.9% compared to the previous year, paying more than June 2.8% in June.

The point to remember from that? Consumers spend more, but they still have painfully high inflation, a problem that mainly affects work and the middle class, which spend more in goods than for services.

So that consumers were buying?

Mainly larger items, including everything, from stocks to stocks. What don’t they buy? Optional things, such as travel, restaurants or services.

It is probably because the services are starting to cost much more.

The respondents interviewed by the University of Michigan said in a separate study that they expect prices to increase by 4.8% over the next year. This is compared to 4.5% in July, with consumer confidence at the lowest level since the start of summer.

Essentially, everything sees its prices increase, from entertainment to entertainment, and it will probably climb higher for everything that is imported.

This leads to the largest undercover of these two reports: the imminent implementation of prohibitive prices set up by the Trump administration in an ongoing trade war with essentially the whole world.

One of the sectors likely to be hit the most? Technology and everything that needs abroad parts to operate technology, including flea, cheaper and shipping.

Technological expenditure has remained solid this year

However, despite the pinch of recent inflation and its unwanted twin withdrawal, the Americans spent a lot in technology at a continuous level throughout 2025.

The total technological spending in the United States planned to reach 2.7 billions of dollars in 2025 and the Consumer Technology Association predicting a record of $ 537 billion in consumer technologies.

Part of this consumption could be the test of prices.

These expenses are obvious in significant and current technological purchases, high consumption of mobile data and growing subscription services, although certain specific costs such as streaming and internet supported by advertising see slight decreases as consumers adapt to the economy.

This coincides with the data, such as purchases of sustainable foodstuffs – from all that is from cars to household appliances – has posed their strongest monthly advance since March, increasing 1.9% after consecutive reductions.

“Sustainable product spending rebounded in July, which could alleviate certain concerns related to prices,” the economists of Wells Fargo Tim Quinlan and Shannon Grein told CNN.

What other high points were there?

There are good news for consumers, and it mainly depends on the job and the quantity you have of them and the quantity you make.

Personal income increased by 0.4% in July, supported by stronger wages. But in a disturbing sign, expenses have exceeded this report. This is a signal that economists look closely, because it means that households can dive into savings to maintain purchases. The savings rate went 4.4%.

“Consumers are solid for the moment and the inflation of goods remains contained,” said Chris Rupkey, chief economist of FWDBBB, in CNN. “The pricing war has not yet slowed down the economy significantly or triggering a frightening inflation.”

The markets fog down after the report. Dow’s term contracts dropped by 0.21%, while U&P 500 term contracts slipped by 0.23%and NASDAQ 100 term contracts decreased by 0.44%. The losses were made after the release, in accordance with inflation expectations.

So now we are waiting for the prices

Economists say that the biggest risk is coming. With filtering prices through supply chains, companies are gradually transmitting higher costs.

“The real blow occurs in the next six months,” CNN Heather Long, chief economist of the Navy Federal Credit Union told CNN. She warned that the United States could enter a “Stagflation-Lite” phase, where we have slower growth associated with high inflation.

Unlike 2022, when households still had a pandemic era savings cushion, consumers today show more resistance to price increases. Companies, faced with higher costs, can start cutting staff to protect margins.

“The Fed must cut in September and again in December,” said Long. “The threat of inflation is not acute, but the risk of a layoff increases.”