May 30, 2023 - Economy
Americans' spending hit a new high in April
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Real personal spending — that is, adjusted for inflation — hit another new record in April.
Why it matters: That looming recession? Forecasts for when it could hit keep getting pushed back. We’re definitely not in a recession with spending this strong (and unemployment this low).
- The month's spending growth bested economists’ expectations, coming in 0.5% higher than in March, according to government data out Friday.
What they’re saying: “The consumer is doing their part to keep the economy afloat,” wrote Ryan Sweet, Oxford Economics’ chief U.S. economist, in a research note.
- "The odds of a recession dropped again, as Americans made more and spent more even adjusted for inflation in March,” says Robert Frick, corporate economist with Navy Federal Credit Union. “The combination of more jobs and more wages, with some stimulus savings mixed in, keeps Americans consuming at a high level even in the face of high prices.”
The impact: Up until a few weeks ago, market consensus had been strongly tilted toward the Fed pausing its rate hikes when it meets in June. Not so much anymore. (Axios' Courtenay Brown has more on that.)
