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[Excessive Consumer Spending Fails to Mask Weak Income, US Economic Engine Loses Momentum] ⑴ US personal consumption expenditures rose 0.5% month-on-month in February, slightly below the 0.6% expected by economists surveyed by the Wall Street Journal. However, real spending, adjusted for inflation, only increased slightly by 0.1%, indicating that purchasing power remained virtually stagnant behind the nominal improvement. ⑵ Personal income recorded its first decline in nine months in February, mainly due to the fifth consecutive month of contraction in Medicaid benefits. Wage growth slowed to 4.3% year-on-year, the second-lowest growth rate since the end of the pandemic, with weak income eroding the foundation of consumption. ⑶ The recovery in car showroom traffic after the cold weather boosted spending on new cars and clothing, but entertainment, dining, and gasoline consumption contracted due to icy roads and parking difficulties. Weather disturbances masked the true temperature of demand. ⑷ The surge in oil prices and the evaporation of stock market capitalization triggered by the Iran war will further suppress consumer spending in the coming months, but the impact is not yet sufficient to push the economy into a dangerous zone. (5) NerdWallet senior economist Elizabeth Lundt points out that consumer spending has stagnated over the past four months, with households tending to cut back on spending as a self-preservation measure when facing or anticipating financial hardship. This will substantially drag down the overall economy through a slowdown in growth. (6) Institutional analysis suggests that before the complete end of the Iran conflict and the clarification of the legal disputes arising from Trump's tariff rhetoric, the US economic growth rate is unlikely to accelerate. Meanwhile, slowing wage growth and persistently high inflation are continuously limiting the Federal Reserve's policy space for further interest rate cuts.