Personal income in the US sank 13.1% in April, but personal spending rose modestly by 0.5%, according to Department of Commerce on Friday.
While personal spending came in line with expectations, the market estimate for personal income was to decrease 14.1%.
Personal income in March rose 20.9% from the previous month, mostly due to President Joe Biden administration’s $1.9 trillion stimulus bill and $1,400 stimulus checks to most individuals. That also led personal consumption expenditures (PCE) to rise 4.7% in March.
In April, however, the $3.21-trillion decline in personal income “primarily reflected a decrease in government social benefits,” Department of Commerce said in its statement, noting payments made to individuals from the American Rescue Plan Act of 2021 continued last month, but at a lower level than in March.
The PCE price index, the Federal Reserve’s preferred inflation indicator, increased 0.6% in April. Core PCE index, excluding food and energy, rose 0.7% from the previous month. Year-over-year, they were up 3.6% and 3.1%, respectively.
The Fed has repeatedly said in recent months it will allow inflation to climb slightly above its 2% target to revive American economy from the pandemic until raising interest rates, which is not expected to come until late 2023.
After setting a deficit record in March with $92 billion, the US’ international trade deficit for goods fell $6.8 billion, or 7.3%, to $85.2 billion in April, according to advance figures of the Commerce Department.
“Exports of goods for April were $144.7 billion, $1.7 billion more than March exports. Imports of goods for April were $229.9 billion, $5.1 billion less than March imports,” it said in a separate statement.
Source: Anadolu Agency