U.S. consumers are wilting under renewed stagflation risks

The U.S. economy's key growth driver faces one of the biggest pullbacks since the depths of the Covid pandemic, while price pressures continue to build, sparking concern about renewed stagflation risks in the early days of President Donald Trump's administration.

Consumer spending, which directly and indirectly powers around two-thirds of U.S. economic growth, suffered some of the biggest declines in at least three years during the first two months of 2025.