Consumer spending off to a disappointing start in Q2
Monthly report on the consumer economic landscape from Chief Economist Wayne Best and U.S. Principal Economist Michael Brown.
May 21, 2019 – “The April retail sales numbers have brought back some fear that consumer spending may remain soft beyond the first quarter. However, broader measures of consumer health suggest we should see spending pick up in the months ahead,” according to Visa’s Chief Economist, Wayne Best. Retail sales excluding autos decelerated slightly in April to 3.3 percent year-over-year (YoY), suggesting (overall) consumer spending could be at risk of slipping in Q2.
Other highlights of this report:
Disposable personal income slowed again in March to 3.9 percent year-over-year (YoY). While wage growth continues to hold up, the market sell-off in March had a negative effect on income growth for the month.
The Consumer Confidence Index edged higher in April to 129.2, from 124.2 in March, indicating consumer’s assessment of both current and future economic conditions has improved. Equity market sell-offs remain a risk to future confidence readings.
The U.S. economy added another 263,000 jobs in April while the unemployment rate fell to 3.6 percent. The average hours worked by employees fell slightly for the month but hourly earnings remain above 3 percent YoY. Job openings data still point towards a very tight labor market, implying that workers are in short supply.
Sources: Visa Business and Economic Insights and U.S. Department of Commerce
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