US: Details on monthly spending figures shows a much weaker profile for the first five months – Wells Fargo
30.06.2022, 16:34

US: Details on monthly spending figures shows a much weaker profile for the first five months – Wells Fargo

Data released on Thursday, showed real consumer spending fell 0.4% in May while April’s numbers were revised lower. Today's details on monthly spending figures show a much weaker profile for spending in the first five months of the year and sets the scenario for a weaker growth in the second quarter than the data would have suggested just 48 hours ago, explained analysts at Wells Fargo. 

Key Quotes: 

“Yesterday's GDP revisions that lowered estimates for first quarter consumer spending was just a jab; today's May personal income and spending report was the uppercut. Real consumer spending dropped 0.4% in May and prior monthly spending figures were revised lower. At least inflation did not get materially worse; the headline PCE deflator rose less than expected to 6.35%.”

“There is not much that is good about today's report, but something that is at least “less bad” is that the PCE deflator rose “just” 0.6% in May which only marginally lifted the year-over-year rate of inflation to 6.35% from 6.29% previously.”

“With the third estimate of first-quarter GDP, which revised real personal consumption expenditures (PCE) lower to reflect a 1.8% annualized pace of growth, and this sharp decline in May, estimates for second quarter PCE growth will likely be coming down. Even so, our overall expectations for consumer spending have not materially changed. We continue to expect consumers will increasingly rely on their balance sheets to fund spending in the near term despite persistently higher inflation.”
 

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