US Real Disposable Income Falls 0.5% as $4-Plus Gas Drains April Spending
Updated
Updated · Action Forex · May 28
US Real Disposable Income Falls 0.5% as $4-Plus Gas Drains April Spending
22 articles · Updated · Action Forex · May 28
April real disposable income fell 0.5% from March, while inflation-adjusted consumer spending rose just 0.1%, showing households absorbed higher prices rather than meaningfully increasing purchases.
Gasoline outlays jumped 5.7% after a 19.0% March surge, with pump prices staying above $4 a gallon since late March and squeezing budgets despite larger tax refunds and a stable labor market.
Real goods spending slipped 0.1%, led by declines in motor vehicles and parts, recreational goods and clothing, while services spending rose 0.2% with gains in recreation and restaurants.
The personal saving rate dropped to 2.6% from 3.2%, the lowest since June 2022, indicating consumers are drawing down savings as income fails to keep pace with spending.
Core PCE inflation rose 0.2% on the month but accelerated to 3.3% year over year, leaving the Fed with still-elevated inflation as analysts expect 2026 consumer spending growth near 2.0%.
As bond yields surge to 19-year highs, is the new Fed chair facing an unavoidable market correction?
With a divided committee, can the new Fed chair contain inflation without triggering a recession?
Is changing the Fed's inflation metric a smarter policy or a way to mask persistent price pressures?