The FINANCIAL — U.S. consumer spending was little changed in April, the latest sign of caution among American households, according to Nasdaq.
Personal spending, which measures purchases of everything from home appliances to haircuts, decreased less than 0.1% from the prior month on a seasonally adjusted basis, the Commerce Department said on June 1. Spending rose a revised 0.5% in March, compared with the initially reported 0.4%.
Personal income, which measures money received from various sources including wages and government assistance programs, climbed 0.4% in April from the prior month.
Economists surveyed by The Wall Street Journal had expected spending would rise 0.2% in April and income would climb 0.3%.
Consumer spending generates more than two-thirds of U.S. economic output, and is a key driver of growth. But outlays slowed during a harsh winter and have yet to show signs of a sustained pickup despite better weather, solid job creation and gasoline prices that remain well below levels from a year ago.
Indeed, consumer confidence appears to have softened. The University of Michigan final May sentiment index, out last week, came in at a six-month low.
Monday’s report showed spending on services increased 0.2% in April from the prior month, but spending on goods fell 0.5%.
When adjusted for inflation, overall consumer spending was flat in April.
U.S. households appear more inclined to save rather than splurge in recent months. The personal saving rate rose in April to 5.6% from 5.2% the prior month.
While consumer spending slowed markedly in the opening months of the year, many economists expect it to rebound at some point as the temporary effects of winter and a West Coast port strike wane. The port disruptions snarled shipments of imported goods and retailers have complained of delays receiving some products.
Monday’s report also showed U.S. inflation in April undershot the Fed’s 2% target for the 36th consecutive month. The personal consumption expenditures price index, which is the central bank’s preferred inflation gauge, rose 0.1% in April from a year earlier, the smallest increase since October 2009.
Excluding the volatile food and energy categories, prices climbed 1.2% in April from a year earlier.
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