US: Consumer spending likely picked up in the second quarter – Wells Fargo

Research Team at Wells Fargo, suggests that despite the moderation in consumer confidence, it appears that consumer spending has picked up in the second quarter.

Key Quotes

“Real spending rose 0.6 percent in April, putting the year-over-year increase at 3.0 percent. Reflecting a pickup in inflation, nominal spending rose 1.0 percent in the month. We are expecting another solid monthly increase of 0.3 percent in personal consumption.

Real personal disposable income also points to continued gains in personal consumption. Real disposable income increased 3.3 percent over the past year, ahead of the pace of spending. Consequently, the saving rate has increased over the past year. A tighter labor market should continue to support personal income and spending. We expect real disposable income and real spending will increase 3.2 percent and 2.8 percent, respectively, in 2016.”