Saturday, January 20, 2018

Consumer spending posts weak April reading


Friday, May 28, 2010
by MARTIN CRUTSINGER

The country added 290,000 jobs in April. But the jobless rate jumped to 9.9 percent as people who had given up looking for work have resumed searches. High unemployment could dampen spending going forward, limiting the pace of the economic recovery.
The country added 290,000 jobs in April. But the jobless rate jumped to 9.9 percent as people who had given up looking for work have resumed searches. High unemployment could dampen spending going forward, limiting the pace of the economic recovery.

WASHINGTON — Consumer spending was stagnant in April while incomes posted a tiny advance, signs that the economic recovery could slow.

The flat spending level was the weakest showing in seven months, according to the Commerce Department report. Economists had expected a 0.3 percent rise.

Personal incomes rose 0.4 percent, slightly off expectations.

More people are holding on to their money, the report noted. The savings rate rose 3.6 percent in April. The rate had fallen to 3.1 percent in March, the lowest reading since October 2008.

Consumer spending is closely watched because it accounts for 70 percent of total economic activity.

The unchanged level of spending came despite a 0.6 percent rise in March. It also was flat despite a 0.4 percent rise in April retail sales.

"The lesson here is that relatively strong retail sales numbers do not guarantee robust consumption," said Ian Shepherdson, chief U.S. economist at High Frequency Economics, noting that retail sales account for only two-fifths of spending.

The rise in incomes followed a similar jump in March. A pickup in wages and salaries are being helped by increases in payroll employment.

The country added 290,000 jobs in April. But the jobless rate jumped to 9.9 percent as people who had given up looking for work have resumed searches. High unemployment could dampen spending going forward, limiting the pace of the economic recovery.

The government reported Thursday that the overall economy, as measured by the gross domestic product, grew at an annual rate of 3 percent in the January-March quarter. That was below the initial 3.2 percent estimate for first quarter GDP growth. Economists worry that growth won't be high enough to push down the unemployment rate and generate the kinds of income gains that will support sustained spending increases.

The Trucker staff may be contacted to comment at editor@thetrucker.com.

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