Consumer spending was stagnant in April, remaining at $10.4 trillion, the weakest showing in the last seven months. Consumer spending is closely monitored because it accounts for 70% of national economic activity and is seen as a barometer for the overall economic health of the US citizenry and the economy as a whole. This was despite the fact that personal income grew 0.4% for the month.
However, most economists still believe that spending by consumers will increase over the quarter by 3%. This is largely due to the expected 503,000-job increase for the month of May. Most of these though will be part-time, temporary workers hired by the government for the census. This nonetheless means that 15.3 million people remain out of work. Furthermore, consumer spending will be boosted by historically low mortgage rates and low gas and utility costs. An additional explanation for this lack of growth is that personal saving increased 3.6 percent in April.