In United States – lower consumer expenditures

On Friday it was reported that consumer expenditures in United States lowered during April for the first time in the past year, as this reflected lower price levels, as well as unchanged remuneration and concerns appeared this could influence US economy in the coming months. Personal Spending, that encompasses automobile, clothing, healthcare, heating and etc. expenditures, decreased by 0.2% in April. This indicator is of huge importance, as consumer expenditures form about 67% of US economic activity. Common practice for American consumers is to spend more if their income rises, supporting growth. However, labour market recovery was still face to face with difficulties, yet restraining remuneration growth.

Personal Income remained without change during April, compared to March. Taking into account inflation rates, personal spending and personal income rose by 0.1%. Yesterday reports showed that Consumer Spending indicator in US rose by 3.4% during Q1, while savings rose by a slower 2.3% rate during Q1, compared to 5.3% during Q4 2012.