US consumer spending appears solid early in second quarter

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Most economists expect consumer spending will support the US economy despite rising risks of a recession.

Most economists expect consumer spending will support the economy despite rising risks of a recession as the cumulative and delayed effects of the Federal Reserve’s fastest monetary policy tightening campaign since the 1980s start to broaden out. The data did not change economists’ expectations that the US central bank will stop hiking interest rates next month.

Economists polled by Reuters had forecast core retail sales would gain 0.3%. Core retail sales correspond most closely with the consumer spending component of gross domestic product . Consumer spending, which accounts for more than two-thirds of US economic activity, accelerated in the first quarter, offsetting the drag on GDP growth from an inventory liquidation.last quarter. Goldman Sachs lifted its second-quarter GDP growth tracking estimate by two-tenths of a percentage point to a 2% pace.

A survey on Tuesday showed the National Association of Home Builders/Wells Fargo Housing Market index increased five points to a reading of 50 this month, the fifth straight monthly increase. That rise lifted the index to the midpoint mark of 50 for the first time since July 2022. Furniture store sales fell 0.7% while receipts at electronics and appliance stores dropped 0.5%. Spending on hobbies decreased 3.3%. Sales at service stations fell 0.8%.

 

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