After slowing sharply in the first three months of the year, consumer spending has slowed even further to open the second quarter, raising questions over the projected trend for economic growth in the coming months, according to Reuters. On Friday, the Commerce Department reported that consumer spending increase 0.4% in April from the prior month, slowing from the 0.5% gain posted in March. The figures marked the 10th consecutive monthly increase in consumer spending, but the data fell short of economists’ expectations for a 0.5% increase.
Adjusted for inflation the report showed only a 0.1% increase in consumer spending, and Pierre Ellis of Decision Economics said, “This shows that the trend going into the second quarter is weaker than what people had thought.” He added, “This promotes caution about projecting faster growth in the second quarter,” after the rate of growth was cut nearly in half in the first three months of the year. Meanwhile, the National Association of Realtors reported that its pending home sales index dropped 11.6% in April to 81.9, which is the lowest level since September. The drop was far greater than economists had expected.
Click here to read the story on consumer spending from Reuters.