Fact Check: Overall spending fell 0.1%, signaling economic slowdown.

Fact Check: "Overall spending fell 0.1%, signaling economic slowdown."

What We Know

The claim that "overall spending fell 0.1%" is supported by recent data from the U.S. Commerce Department, which reported that consumer spending dropped by 0.1% in May 2025 after a 0.2% gain in April (U.S. News, Star Advertiser). This decline in consumer spending, which constitutes more than two-thirds of economic activity, is significant as it suggests a potential slowdown in economic growth, particularly when combined with other indicators of economic health.

Additionally, the Conference Board's Leading Economic Index (LEI) also indicated a downturn, falling by 0.1% in May 2025, following a larger decline of 1.4% in April (U.S. News, Conference Board). This index is designed to predict future economic activity, and its decline suggests that economic conditions may worsen in the near future.

Analysis

While the claim that overall spending fell by 0.1% is accurate, it is essential to contextualize this within broader economic indicators. The drop in consumer spending aligns with a trend of increasing consumer pessimism, driven by factors such as inflation, rising interest rates, and uncertainty surrounding import tariffs (U.S. News). The Conference Board's analysis notes that while the LEI has declined, it does not predict an imminent recession but rather a significant slowdown in growth, with projected GDP growth at only 1.6% for 2025 (U.S. News).

However, it is important to note that the overall economic picture is mixed. For instance, the economy experienced a growth rate of 2.8% above inflation in 2024, and while consumer spending is projected to slow, it had previously risen by 3% in 2024 (The Outlook for the U.S. Economy in 2025). This suggests that while there are signs of a slowdown, the economy is not uniformly declining; rather, it is experiencing fluctuations that may indicate a transition phase rather than a full-blown recession.

The reliability of the sources is generally high, with the U.S. Commerce Department and the Conference Board being reputable institutions that provide critical economic data. However, interpretations of this data can vary, and it is essential to consider multiple perspectives when assessing economic conditions.

Conclusion

The claim that "overall spending fell 0.1%, signaling economic slowdown" is Partially True. While the reported decline in consumer spending is accurate and indicative of potential economic challenges, it is essential to recognize that this is part of a broader economic context that includes previous growth and mixed signals from other economic indicators. Thus, while spending has indeed fallen, the overall economic situation is more nuanced, suggesting a slowdown rather than a definitive downturn.