The economy seems to be picking up steam after a sluggish first quarter, as consumer spending rose in April at the fastest pace in nearly seven years.
Personal spending rose 1% in April from a month earlier — the largest one-month jump since August 2009, the Commerce Department said on Tuesday. Personal spending rose 0.2% in February and was unchanged in March.
The Wall Street Journal said April’s spending data is another sign that the economy is picking up again, “following a familiar pattern of a gloomy winter leading into a brighter spring.”
“After a six-month lull, consumers emerged able and willing to spend more freely in early spring,” Oxford Economics’ head of U.S. macroeconomics Gregory Daco told the WSJ. “This is good news for the economy as solid employment, firming wage growth, and upbeat confidence should support the upbeat momentum in” the second half of the year.
Personal income, including earnings from wages and other sources, rose 0.4% in April, while the personal saving rate fell to 5.4%, from 5.9% in March. (The rate is a percentage of after-tax income). The April saving rate was the lowest level of the year.
“Tuesday’s report also showed steady gains in income, suggesting the labor market remains robust … ,” The WSJ wrote. “Federal Reserve officials are watching those key metrics as they weigh another move on the central bank’s benchmark interest rate.”