Breaking: US Personal Spending plunged by 13.6% in April

Eren Sengezer FXStreet

Personal Spending in the United States declined by 13.6% on a monthly basis in April, the data published by the US Bureau of Economic Analysis (BEA) showed on Friday. This reading came in worse than the market expectation for a fall of 12.6%.

Meanwhile, Personal Income unexpectedly increased by 10.5% in the same period and beat analysts' estimate for a decrease of 6.5% by a wide margin.

In the press release, "the April estimate for personal income and outlays was impacted by the response to the spread of COVID-19, as federal economic recovery payments were distributed, and governments continued with “stay-at-home” orders," the BEA explained. "The full economic effects of the COVID-19 pandemic cannot be quantified in the personal income and outlays estimate for April because the impacts are generally embedded in source data and cannot be separately identified."

Market reaction

Investors don't seem to be paying much attention to these data releases while waiting for US President Donald Trump to host a news conference on China later in the day. As of writing, the US Dollar Index, which tracks the greenback's performance against a basket of six major currencies, was down 0.47% on the day at 98.00.

US Dollar Index drops to 2-month lows near 98.20 ahead of Trump.

The greenback faces extra selling pressure at the end of the week and is forcing the US Dollar Index (DXY) to recede to fresh 2-month lows.

US Pres. Trump to hold China news conference on Friday, risk-off themes will be in play.

The US President Donald Trump will hold a news conference on China this Friday. This will likely include the president's opinions on COVID-19 and China's handling of it, trade relations, currency wars and the US administration's political response to China’s parliament approving a decision to go forward with national security legislation for Hong Kong.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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