Report: Consumer Spending Dips During April
U.S. consumers cut back on spending in April for the first time in a year, taking an unexpected pause after a big jump during the previous month. The results, however, are unlikely to derail an expected spring rebound in the economy.
USA Today reported that consumer spending, which accounts for 70% of overall economic activity, fell 0.1% in April, the Commerce Department said Friday. The drop was the first in 12 months. But it followed a 1% surge in spending in March, which marked the biggest increase in more than four years.
“It is obvious that after an unseasonably colder January and February consumers came out with a vengeance in March,” Chris Christopher, an economist at IHS Global Insight, said in a note to clients. “So, April’s poor showing on the spending front is payback for a strong March.”
The latest figure reflects reductions in durable goods purchases such as autos and in services such as heating bills. While disappointed, analysts say the results don’t change the broader upward trajectory of the economy and predict consumer demand to bounce back in May.
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