Personal incomes and spending for April were a key newsmaker last week. Incomes for the month ticked down by $5.6 billion, or less than 0.1 percent, while personal consumption expenditures (PCE) declined $20.5 billion, or 0.2 percent, according to data released last week by the Bureau of Economic Analysis.
Disposable personal income (DPI; income after taxes) also saw a slight decrease in April of $16.1 billion, or 0.1 percent. Real disposable income (DPI adjusted for inflation) increased 0.1 percent in April, and real PCE increased 0.1 percent.
Personal outlays — PCE, personal interest payments, and personal current transfer payments — dropped by $21.7 billion in April. Personal saving — DPI less personal outlays — grew to $306.9 billion in April from $301.4 billion in March. This put April’s personal saving rate (personal saving as a percentage of disposable personal income) at 2.5 percent.
Turning to employment, first-time claims for unemployment insurance filed during the week ending May 25 hit 354,000, an increase of 10,000 claims from the prior week’s revised figure of 344,000, the Employment and Training Administration reported. The four-week moving average was 347,250, a gain of 6,750 from the preceding week’s revised average of 340,500.
The total number of unemployed Americans covered by unemployment insurance during the week ending May 18 grew to 2,986,000, a gain of 63,000 from the previous week’s revised level of 2,923,000, the Administration also reported. The four-week moving average was 2,986,500, a drop of 11,500 from the preceding week’s revised average of 2,998,000.
While personal incomes and spending showed minimal change and jobless benefits were up, overall consumer opinions showed some optimism. The Conference Board reported last week that its Consumer Confidence Index for May grew to 76.2 (a baseline of 100 was set in 1985) from 69 in April. The Present Situation Index — how consumers feel about their current economic circumstance — hit 66.7 in May from April’s 61, the Board reported. The Expectations Index — how consumers expect the economy to fare — advanced to 82.4 in May from April’s 74.3.
Other consumer studies released last week echoed The Conference Board’s finding. The Index of Consumer Sentiment grew to 84.5 from 76.4 in April, according to last week’s release from the Thomson Reuters/University of Michigan Surveys of Consumers. The survey’s current conditions index increase to 98 in May from 89.9 in April, and consumer expectations for May grew to 75.8 from 67.8.
This week, we can expect:
Monday — April construction spending from the Census Bureau; May car and truck sales from the automakers.
Tuesday — April trade balance from the Census Bureau.
Wednesday — First quarter productivity figures from the Bureau of Labor Statistics; April factory orders from the Census Bureau.
Thursday — Initial jobless claims for last week from the Employment and Training Administration.
Friday — April consumer credit from the Federal Reserve; May payrolls, unemployment rate, hourly earnings and average workweek from the Bureau of Labor Statistics.