Bloomberg (05/31/13) Shobhana Chandra
Consumer spending fell in April for the first time in nearly a year, the U.S. Department of Commerce reported Friday. Spending fell 0.2% following a 0.1% increase in March that was smaller than previously stated. Incomes have stagnated, suggesting consumer spending will struggle to recover without more substantial improvements in the labor market.
“Spending growth is going to be soft,” says Gus Faucher, a senior economist at PNC Financial Services Group Inc. in Pittsburgh. “Inflation is too low from the [U.S. Federal Reserve’s] perspective, so they are going to be cautious about tapering” bond purchases geared to boost the economy, he says. “We will see better growth toward the end of the year.”