I just can't see another rate increase.......U.S. Economy: Spending Growth Slows and Durable Orders Plunge
By Vince Golle
Washington, May 26 (Bloomberg) -- Americans' incomes rose at
a faster pace than their spending in April for the second straight
month, the first time that's happened in two years, as consumers
bought fewer autos and other durable goods, Commerce Department
reports showed today.
Incomes rose 0.7 percent last month, matching March's gain,
and spending rose 0.4 percent -- the smallest increase in nine
months -- after rising 0.6 percent a month earlier. That boosted
the savings rate to 0.7 percent in April, its highest since
January, from 0.4 percent in March.
Orders at U.S. factories for durable goods -- expensive items
made to last more than three years -- unexpectedly fell 6.4
percent in April as demand for electronic equipment such as
semiconductors posted a record drop and auto purchases declined.
U.S. Treasury securities rose after the reports, which some
investors interpreted as signs of slower growth Federal Reserve
policy-makers want to see. ``You have the outline of an emerging
economic slowdown,'' said Joel Naroff, president of Naroff
Economic Advisors in Holland, Pennsylvania. ``We, and the Fed,
have miles to go before that conclusion can be reached, but the
journey is under way.''
A separate report today showed that the University of
Michigan's index of consumer sentiment rose this month to 110.7
from 109.2 in April, people with access to the study said. That
put it close to the record reading of 112 set in January.
That suggests stock market declines -- the Nasdaq Composite
Index, for example, has fallen more than 36 percent since its
April record -- aren't yet resonating with consumers. The Nasdaq
Composite Index fell 3 points, or 0.1 percent, in afternoon
trading, and the Dow Jones Industrial Average rose 30 points, or
0.3 percent. The 10-year Treasury note rose 1/2 point, pushing
down its yield 7 basis points to 6.33 percent. |
