US April consumer spending up 0.5 pct; personal income up 0.3
WASHINGTON (AFX) - Consumer spending rose 0.5 pct in April, while personal income rose 0.3 pct, the Commerce Department said.
Consumer spending was stronger than market expectations while income was below market forecasts. The consensus of Wall Street forecasters called for a 0.3 pct increase in consumer spending, while income was expected to increase 0.7 pct.
In March, consumer spending rose a revised 0.3 pct, down slightly from the initial estimate of a 0.4 pct increase.
Income rose 0.4 pct in March, unrevised from the initial estimate.
The rise in spending in April was due to a strong gain in durable goods spending.
Durable goods spending rose a 1.4 pct in April, while spending on non-durable goods rose 0.8 pct. Spending on services rose 0.2 pct.
Disposable personal income, or income less personal tax payments, rose 0.3 pct in April, compared with a 0.5 pct rise the month before.
Wages and salaries rose 0.1 pct in April to 5.17 trln usd, after rising 0.2 pct in the previous month.
The personal savings rate - personal saving as a percentage of disposable personal income - fell to 2.8 pct in April from 3.0 in March.
The income and spending data are adjusted for seasonal variations but not inflation.
Inflation, as measured by the personal consumption expenditures (PCE) deflator, rose 0.4 in April after rising 0.3 pct in March. This is the strongest increase since October. The Federal Reserve now uses the PCE price index as its prime gauge of consumer inflation, replacing the CPI data.
Excluding food and energy prices, the PCE deflator was up 0.2 pct, the largest gain since November.
On a year-on-year basis, the PCE deflator was up 1.0 pct. Excluding food and energy, the deflator was up 1.3 pct year-on-year.
Adjusted for inflation, consumer spending was up 0.2 in April after remaining flat in March. Disposable personal income fell 0.1 pct, after rising 0.2 pct in March. This is the first decline since October.