The latest U.S. consumer spending numbers bode well for the economy, with the Commerce Department reporting its biggest increase in more than six years in April. Consumer spending rose 1.0 percent over March, or $119.2 billion, compared with just a $3.7 billion gain the previous month.
Automobile purchases were up, pointing to economic growth that could prompt the Federal Reserve to raise interest rates soon.
A Reuter’s article said while auto sales accelerated, the report showed an ebb in consumer confidence in May, but anticipates spending will remain supported by strong gains in house prices and an improving labor market with increasing wages.
“Fed Chair Janet Yellen said on Friday an interest rate hike would probably be appropriate in the ‘coming months,’ if the economy continued to pick up and the labor market added jobs,” the article explains.
“Consumer spending, which accounts for more than two-thirds of U.S. economic activity, surged 1.0 percent last month as households bought a range of goods and services.
The gain, better than economists had expected, was reassuring after a nearly flat January-March period that had some worried that U.S. economic growth was slowing.