U.S. Consumer Spending Jumped in April and Inflation Accelerated

 Federal Reserve’s preferred gauge of consumer prices increased 4.4% in April from a year earlier, up from March

Adjusted for inflation, consumer spending rose 0.5% last month.

In addition to wage gains, households still have excess savings from during the pandemic, when the government pumped money into the economy in response to Covid-19’s economic disruptions. 

A recent report from the San Francisco Fed estimated that around $500 billion in such excess savings remains in the overall economy. 

“We expect the aggregate stock of excess savings will continue to support consumer spending at least into the fourth quarter of 2023,” the report said.

U.S. Consumer Spending Jumped in April and Inflation Accelerated - WSJ