The Bureau of Economic Analysis said that personal spending rose modestly in April, up 0.3 percent. This was slightly higher than the 0.2 percent growth observed in March. Weaker personal income growth held purchases back, with personal income increasing just 0.2 percent (down from 0.4 percent the month before).
With spending outstripping income, the savings rate dipped to 3.4 percent, essentially the low levels seen in the past three months. This represents a falloff in savings (or conversely, an increase in borrowing) from the 4 percent rate of January or the 4.8 percent of one year again. More Americans are needing to utilize their savings to make purchases, a trend that has persisted for the past year or so.
Manufacturing wage and salary disbursements rose from $715.3 billion in March to $719.6 billion, continuing a gradual trend upward. Looking at spending on manufacturing goods, these were also higher, but mixed. Goods purchases overall were up $3.8 billion to $3.82 trillion at the annual rate. Durable goods spending rose $7.7 billion; whereas, nondurable goods purchases fell by $3.9 billion.
Inflationary pressures continue to ease. Prices for consumer items are now up 1.8 percent at the annual rate, down from 2.1 percent the month before. In general, goods prices have edged lower each month for the past few months, with the most recent decline assisted by lower energy costs.
Chad Moutray is chief economist, National Association of Manufacturers.