Consumer Spending Increased in April, Complicating Fed’s Upcoming Decision on Interest Rates

A recent report by the Department of Commerce shows that consumer spending in the U.S. rose by 0.8% in April, following recent decline. With personal income also rising 0.4% in April, the report illustrated consumer resiliency to higher interest rates and slower economic growth in Q1, which could further complicate the Federal Reserve’s debate on whether to raise interest rates in June. Consumers continued to spend on big ticket items, with spending on vehicles up in April, following two months of decline. This rise in consumer spending, coupled with low unemployment and elevated wage growth signals strong economic activity, which rose to its highest level in 13 months. Additionally, core prices, which could be a predictor of future inflation, rose 4.7% in April from a year earlier, up from 4.6% in March. Read More