US: Personal spending jumps, weakness in inflation likely exaggerated - Wells Fargo
Data released today showed a surge in consumer spending and a modest rise in income. Analysts at Wells Fargo, point out that the data diminishes the case for softening consumer spending.
Key Quotes:
“February’s spending number was hardly worth the wait, up just 0.1%, but March saw a 0.9% surge—the biggest one-month increase since 2009. That likely puts to bed any lingering worries about a spending retrenchment signaled by the curious drop in December spending.”
“Personal income has been less inspiring. The 0.1% March increase is obviously not on pace with the spending surge, but wages and salary gains of 0.4% are more encouraging.”
“The core PCE deflator showed slower inflation than expected coming in at just 1.6%. The weakness was likely exaggerated in March and we look for some pick-up in this measure over the next few months, but we expect it to remain below 2% this year.”
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
