Friday's unexpected decline in consumer spending is somewhat disconcerting in the wake of the negative GDP revision last week

Jay Soloff

Argonath Financial

Friday's unexpected decline in consumer spending is somewhat disconcerting in the wake of the negative GDP revision last week. Consumer purchases dropped 0.1% after climbing 1% in the prior month. That's the first decrease in a year. Adjusting for inflation, spending decreased by the most since September 2009. However, it's way too early to give up on the US economy. First off, the prior month's 1% spending increase was the fastest growth rate in 5 years, so it stands to reason that spending would cool off. Moreover, the biggest spending drop was in household outlays - which include utilities. As the weather warms towards summer temps, utilities spending is going to decline. What's more, personal income climbed by 0.3% in April. As long as incomes continue to rise, it will eventually result in more spending. (VIEW LINK)


Jay Soloff
Jay Soloff
Research Analyst
Argonath Financial

I'm an investments analyst for a US-based independent investment research firm. My focus is on economics, options, and all types of stocks, but especially tech, Internet, and renewable energy companies. I have experience as a options market...

Expertise

No areas of expertise

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.

Comments

Sign In or Join Free to comment