Inflation, high interest rates, and dwindling household savings may finally be affecting the economy.
Consumer spending saw a modest rise of 0.2 percent in April, marking the smallest increase in the past three months, according to data released by the Department of Commerce on Friday. Economists had anticipated a 0.4 percent rise.
Some analysts believe that an early Easter may have boosted March spending at April’s expense. In March, consumer spending surged by 0.7 percent. When combined, the spending figures for these two months appear healthier.
Despite this, the modest increase in April is likely to prompt Wall Street to lower GDP forecasts for the second quarter. The Atlanta Fed’s GDPNow model currently predicts the economy to grow at a 2.7 percent rate for the April through June period, down from 3.5 percent earlier this week.
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