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Analysts at Scotiabank explained that Personal income rose a steady 0.3% m-o-m in April, mostly in line with expectations (Nomura: 0.4%, Consensus: 0.3%), with healthy gains in wages and salaries.

Key Quotes:

Personal consumption expenditures (PCE) increased a brisk 0.6% m-o-m, slightly above expectations (Nomura: 0.5%, Consensus: 0.4%). The increase in March was revised up to a 0.5% increase, implying better momentum heading into Q2. This appears consistent with our view that consumer spending will pick up in Q2 after relatively soft growth in Q1.

GDP tracking update:

The increase in personal consumption expenditure in April was slightly stronger than expected. Further, backward revisions suggest more momentum in personal spending growth in Q2. Thus, after rounding, we raised our Q2 real GDP tracking estimate by 0.3pp to 3.8% q-o-q saar.