US personal incomes rise in April, but spending still flat
Personal incomes rose more than expected in April but that again failed to translate into increased spending, government statistics revealed.
US personal incomes increased at a 0.4% month-on-month clip in April, according data from the Department of Commerce showed.
Economists had been expecting a rise of 0.3%.
However, as some analysts have been pointing out of late, America’s consumers have been saving the gains from the drop in the oil price instead of spending them.
Spending as measured by personal consumption expenditures was flat in comparison with the prior month (consensus: 0.1%).
In year-on-year terms the deflator for personal consumption expenditures advanced by just 0.1% (consensus: 0.2%).
The core rate for the PCE deflator edged lower to 1.2% from 1.3% in March (consensus: 1.4%).
Commenting on the figures, Capital Economics attributed the lack of spending partially to the fact that expenditures rose late last year and in part also to the fact that some price cuts had yet to take effect.
"With key headwinds to spending having eased, we expect consumption growth to be pretty strong this year as a whole," the analysts wrote.