US Consumer Spending Falls 0.2 Percent in April

Consumer spending in the U.S. unexpectedly declined in April as incomes stagnated, putting the biggest part of the U.S. economy on shaky ground at the start of the second quarter.
Household purchases, which account for about 70 percent of the economy, dropped 0.2 percent, after a 0.1 percent rise the prior month that was smaller than previously estimated, a Commerce Department report showed today in Washington. The median estimate in a Bloomberg survey of 79 economists called for no change. Incomes (PITLCHNG) were unchanged and prices dropped by the most in more than four years.

The data underscore the risk to the economy from the federal budget cuts that began in March and a higher payroll tax since the start of 2013. At the same time, the housing rebound, stock market gains and cheaper fuel costs are helping underpin household finances and confidence, which will help prevent an extended pullback.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza