Haver Analytics
Haver Analytics
| May 26 2023

U.S. Consumer Spending Is Surprisingly Strong in April

  • Spending on goods declines; service outlays increase.
  • Real disposable income improves.
  • Core price inflation weakens further.

Personal consumption expenditures (PCE) increased 0.8% (6.7% y/y) in April following 0.1% upticks in each of the prior two months. March was revised from no change but February was unrevised. A 0.4% increase had been expected in the Action Economics Forecast Survey. Adjusted for price inflation, real consumer spending on good & services increased 0.5% (2.3% y/y) last month after little-change in March.

Outlays on durable goods recovered 1.4% (2.6% y/y) adjusted for price change during April following declines of 1.1% in each of the prior two months. Real spending on motor vehicle & parts improved 2.2% last month (4.2% y/y) after falling sharply in both of the prior two months. Real spending on furniture & appliances improved 1.3% (2.1% y/y) after falling sharply for two straight months. Real spending on recreational goods & vehicles rose 1.1% (4.0% y/y) in April after two months of moderate decline.

Spending on nondurable goods rose 0.4% in real terms in April (0.8% y/y) after a 0.2% March decline. Apparel spending fell 0.2% (-0.4% y/y) in real terms last month after two straight 1.4% shortfalls. Outlays on gasoline & other energy products weakened 0.6% last month (+2.2% y/y) following two months of sharp increase. Real food & beverage outlays rose 0.3% (-0.9% y/y) and reversed the March decline.

Real spending on consumer services rose 0.3% (2.7% y/y) during April after a 0.2% increase. Recreation services buying surged 1.3% (3.6% y/y) following two consecutive months of 0.6% decline, while real food services and accommodations edged 0.1% higher (2.1% y/y) following a 0.4% decline. Real transportation services outlays surged 1.3% (0.4% y/y) following a 0.7% decline while real housing & utilities expenditures eased 0.2% (+0.6% y/y) after rising 0.9% in March. Real healthcare spending gained 0.2% (5.9% y/y) after a 0.4% increase. Financial services & insurance expenditures surged 1.1% (3.1% y/y) after holding steady in March.

Personal income rose an expected 0.4% (5.4% y/y) in April after two straight 0.3% increases. The gain reflected a 0.5% increase (5.6% y/y) rise in wages & salaries which followed a 0.3% increase in March. Proprietors' income fell 0.4% (+3.1% y/y) last month following 0.1% declines in both of the prior two months. Rental income strengthened 1.5% (14.0% y/y) after two straight months of 1.4% increase. Receipts on assets rose 1.0% (6.3% y/y) after a rise of 0.4% in March as interest income surged 1.3% (8.1% y/y) and dividend income rose 0.7% (4.3% y/y). Personal transfer receipts fell 0.4% (+4.4% y/y) in April after a 0.1% March uptick.

Disposable income rose 0.4% (7.9% y/y) last month following a 0.3% rise in March. Taxes held steady (-8.8% y/y), after six months of decline. Real disposable earnings were unchanged (+3.4% y/y) last month following a 0.2% gain in February.

The personal saving rate fell to 4.1% in April from 4.5% in March. The level of personal savings declined 8.7% (+23.2% y/y) after rising 5.2% in March.

The PCE chain price index increased 0.4% (4.4% y/y) in April following a 0.1% gain. The core index excluding food & energy prices also rose 0.4% (4.7% y/y) after rising 0.3% in March. Goods prices rose 0.3% (2.1% y/y) following a 0.2% decline while services prices gained 0.4% (5.5% y/y) following a 0.3% rise. The PCE services price index excluding energy & housing increased 0.4% (4.5% y/y) after a 0.3% March increase. Energy prices rose 0.7% (-6.3% y/y) in April following a 3.7% drop while food prices eased slightly (+6.9% y/y) after falling 0.2% in March.

The personal income and consumption figures are available in Haver's USECON database with detail in the USNA database. The Action Economics forecasts are in AS1REPNA.

  • Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio.   Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984.   He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C.   In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists.   Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.

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