Reed Cavendish Wealth Management Reports US Consumer Spending Up in April

While US personal income increased by an expected 0.3 percent in April, Reed Cavendish Wealth Management economists say consumer spending increased by more than anticipated.

Economists at Taipei, Taiwan-based investment house, Reed Cavendish Wealth Management say the recently released official data is an indication that U.S. economic expansion is gaining momentum in the second quarter as inflation continues to increase.

U.S. consumer spending increased more than expected in April, a further sign that economic growth was regaining momentum early in the second quarter, while inflation continued to rise steadily.

The Department of Commerce recently stated that consumer spending, which makes up 66 percent the U.S. economy, expanded by 0.6 percent in May. Reed Cavendish Wealth Management economists say this was the biggest jump since December last year. In addition, figures for March were upwardly revised to reflect that consumer spending increased 0.5 percent instead of the originally reported 0.4 percent rise.

Reed Cavendish Wealth Management economists had predicted that consumer spending would increase by 0.4 percent in April and said that spending was bolstered by buying of fuel and energy products. The buying of non-durable products jumped 0.9 percent while spending on services increased 0.5 percent, boosted by an increased demand for domestic utilities.

U.S. prices continued to increase slowly and the PCE price index increased 0.2 percent for the third consecutive month.

Reed Cavendish Wealth Management economists expect the yearly core PCE price index will exceed the Federal Reserve’s target over the course of the next few months. The Federal Reserve is expected to hike borrowing costs this month. This will follow an interest rate increase in March and Reed Cavendish Wealth Management economists say another two hikes later this year are likely.

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Source: Reed Cavendish Wealth Management


Categories: Business to Consumer

Tags: Reed Cavendish Wealth Management, ReedCavendish, US consumer spending