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Economic Times
27-06-2025
- Business
- Economic Times
US consumer spending falls unexpectedly in May
AP FILE - A shopping cart filled with groceries sits in an aisle at an Asian grocery store in Rowland Heights, Calif., Thursday, April 3, 2025. U.S. consumer spending unexpectedly fell in May as the boost from the pre-emptive buying of goods like motor vehicles ahead of tariffs faded, while monthly inflation increases remained moderate. Consumer spending, which accounts for more than two-thirds of economic activity, dropped 0.1% last month after an unrevised 0.2% gain in April, the Commerce Department's Bureau of Economic Analysis said on Friday. Economists polled by Reuters had forecast consumer spending would edge up 0.1%. President Donald Trump's sweeping tariffs, which have led businesses and households to front-run imports and goods purchases to avoid higher prices from duties, have muddled the economic picture. Economists warned it could take time for the tariff-related distortions to wash out of the data. A record goods trade deficit in the first quarter, thanks to a deluge of imports, accounted for much of the 0.5% annualized rate of decline in gross domestic product during that period. Consumer spending also nearly braked last quarter after being propelled by households pulling forward goods purchases. Households also spent less on services last quarter, helping to restrain growth in consumer spending to only a 0.5% pace, the slowest rate since the second quarter of 2020. That data potentially puts spending on a slow growth path in the second quarter. The combination of soft consumer spending and inflation is, however, unlikely to spur the Federal Reserve to resume cutting interest rates in July. Fed Chair Jerome Powell told lawmakers this week that the U.S. central bank needed more time to gauge the impact of tariffs on prices before considering a rate cut. Economists argue that price increases have remained moderate because businesses are still selling inventory accumulated before the tariffs went into effect. They expect inflation will start picking up, beginning with consumer price data for June. The Personal Consumption Expenditures (PCE) Price Index gained 0.1% in May, matching the rise in April, the BEA said. In the 12 months through May, PCE inflation increased 2.3% after climbing 2.2% in April. Stripping out the volatile food and energy components, the PCE Price Index increased 0.2% last month. That followed a 0.1% rise in the so-called core PCE inflation in April. In the 12 months through April, core inflation advanced 2.7% after rising 2.6% in April. The Fed tracks the PCE price measures for its 2% inflation target. The central bank last week left its benchmark overnight interest rate in the 4.25%-4.50% range, where it has been since December.
Business Times
27-06-2025
- Business
- Business Times
US consumer spending falls unexpectedly in May
[WASHINGTON] US consumer spending unexpectedly fell in May as the boost from the pre-emptive buying of goods like motor vehicles ahead of tariffs faded, while monthly inflation increases remained moderate. Consumer spending, which accounts for more than two-thirds of economic activity, dropped 0.1 per cent last month after an unrevised 0.2 per cent gain in April, the Commerce Department's Bureau of Economic Analysis said on Friday (Jun 27). Economists polled by Reuters had forecast consumer spending would edge up 0.1 per cent. President Donald Trump's sweeping tariffs, which have led businesses and households to front-run imports and goods purchases to avoid higher prices from duties, have muddled the economic picture. Economists warned it could take time for the tariff-related distortions to wash out of the data. A record goods trade deficit in the first quarter, thanks to a deluge of imports, accounted for much of the 0.5 per cent annualised rate of decline in gross domestic product during that period. Consumer spending also nearly braked last quarter after being propelled by households pulling forward goods purchases. Households also spent less on services last quarter, helping to restrain growth in consumer spending to only a 0.5 per cent pace, the slowest rate since the second quarter of 2020. That data potentially puts spending on a slow growth path in the second quarter. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The combination of soft consumer spending and inflation is, however, unlikely to spur the Federal Reserve to resume cutting interest rates in July. Fed chair Jerome Powell told lawmakers this week that the US central bank needed more time to gauge the impact of tariffs on prices before considering a rate cut. Economists argue that price increases have remained moderate because businesses are still selling inventory accumulated before the tariffs went into effect. They expect inflation will start picking up, beginning with consumer price data for June. The Personal Consumption Expenditures (PCE) Price Index gained 0.1 per cent in May, matching the rise in April, the BEA said. In the 12 months through May, PCE inflation increased 2.3 per cent after climbing 2.2 per cent in April. Stripping out the volatile food and energy components, the PCE Price Index increased 0.2 per cent last month. That followed a 0.1 per cent rise in the so-called core PCE inflation in April. In the 12 months through April, core inflation advanced 2.7 per cent after rising 2.6 per cent in April. The Fed tracks the PCE price measures for its 2 per cent inflation target. The central bank last week left its benchmark overnight interest rate in the 4.25 per cent-4.50 per cent range, where it has been since December. REUTERS
Time of India
27-06-2025
- Business
- Time of India
US consumer spending falls unexpectedly in May
U.S. consumer spending unexpectedly fell in May as the boost from the pre-emptive buying of goods like motor vehicles ahead of tariffs faded, while monthly inflation increases remained moderate. Consumer spending, which accounts for more than two-thirds of economic activity , dropped 0.1% last month after an unrevised 0.2% gain in April, the Commerce Department 's Bureau of Economic Analysis said on Friday. Economists polled by Reuters had forecast consumer spending would edge up 0.1%. President Donald Trump's sweeping tariffs, which have led businesses and households to front-run imports and goods purchases to avoid higher prices from duties, have muddled the economic picture. Economists warned it could take time for the tariff-related distortions to wash out of the data. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Nortonライセンスの有効期限が切れています? Norton 詳細 Undo A record goods trade deficit in the first quarter, thanks to a deluge of imports, accounted for much of the 0.5% annualized rate of decline in gross domestic product during that period. Consumer spending also nearly braked last quarter after being propelled by households pulling forward goods purchases. Households also spent less on services last quarter, helping to restrain growth in consumer spending to only a 0.5% pace, the slowest rate since the second quarter of 2020. Live Events That data potentially puts spending on a slow growth path in the second quarter. The combination of soft consumer spending and inflation is, however, unlikely to spur the Federal Reserve to resume cutting interest rates in July. Fed Chair Jerome Powell told lawmakers this week that the U.S. central bank needed more time to gauge the impact of tariffs on prices before considering a rate cut. Economists argue that price increases have remained moderate because businesses are still selling inventory accumulated before the tariffs went into effect. They expect inflation will start picking up, beginning with consumer price data for June. The Personal Consumption Expenditures (PCE) Price Index gained 0.1% in May, matching the rise in April, the BEA said. In the 12 months through May, PCE inflation increased 2.3% after climbing 2.2% in April. Stripping out the volatile food and energy components, the PCE Price Index increased 0.2% last month. That followed a 0.1% rise in the so-called core PCE inflation in April. In the 12 months through April, core inflation advanced 2.7% after rising 2.6% in April. The Fed tracks the PCE price measures for its 2% inflation target. The central bank last week left its benchmark overnight interest rate in the 4.25%-4.50% range, where it has been since December.
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Business Standard
25-06-2025
- Business
- Business Standard
Rupee slips after one-day gain; ends 12 paise lower at 86.09/$
Indian Rupee fell on Wednesday, a day after posting the best session of the year, as crude oil prices remained on the higher side, amid the ceasefire between Iran and Israel. The domestic currency closed 12 paise lower at 86.09, a day after closing at 85.97 against the dollar, according to Bloomberg. The unit posted the steepest one-day gains since May 23 on Tuesday, as it appreciated 78 paise. The unit is among the worst-hit Asian currencies this quarter, due to surging oil prices. Tensions in West Asia were under control after US President Donald Trump criticised both nations for breaching ceasefire agreements, just hours after they were agreed upon. Following the ceasefire, crude oil prices fell almost 15 per cent over two sessions. However, Brent crude price was up 1.19 per cent at $67.94 per barrel, while WTI crude prices were higher by 1.20 per cent at 65.14, as of 3:30 PM IST. Market participants are now eyeing upcoming triggers from the US, including the PCE Price Index and GDP data, later this week, according to Jateen Trivedi, VP research analyst - commodity and currency at LKP Securities. "The rupee is expected to trade in a range of 85.70 to 86.25." Investors also await US government data on domestic crude and fuel stockpiles due on Wednesday. Dollar-rupee forward premiums rose as the Reserve Bank of India's announcement of a measure to withdraw excess banking system liquidity lifted near forwards, according to a Reuters report. The 1-year dollar-rupee implied yield rose 5 basis points to 1.94 per cent while the 1-month forward premiums ticked up to around 12 paisa, it added. Meanwhile, the dollar index edged higher after mixed rate-cut comments from Federal Reserve Chair Jerome Powell. Lower inflation and weaker labour hiring could lead to an earlier rate cut, Powell said, while the impact of trade tariffs has to be weighed. The US dollar index, which measures the greenback against a basket of six major currencies, was up 0.27 per cent at 98.12.
Yahoo
02-06-2025
- Business
- Yahoo
Why the Market's Long-Term Outlook is Bullish
Despite the recent flurry of tariff news and economic uncertainty portrayed by pundits, several key indicators are flashing bullish signals, including: The 'GDPNow Model' is a model created by the Federal Reserve Bank of Atlanta to provide a real-time estimate of the current quarter's Gross Domestic Product (GDP) growth. Through its 'Nowcasting' model, the GDPNow Model leverages a purely data-driven model that interprets current data to predict the future instead of simply predicting future economic conditions. Between the first negative GDP reading in several quarters, an escalating trade war, and negative sentiment, the GDP picture looked quite bleak. However, the current market environment illustrates why savvy investors rely on data-driven predictive models to eliminate bias and find the hard truth. In the latest reading, the GDPNow Model for real GDP growth (seasonally adjusted annual rate) in Q2 2025 is a robust 3.8%, up from 2.2% in the last reading. Image Source: Federal Reserve Bank of Atlanta The PCE Price Index (Personal Consumption Expenditures) number was released Friday. The reading came in at a 2.1% gain year-over-yea,r which was softer than Wall Street expected. The key inflation rate hit a 4-year low. Image Source: FRED Meanwhile, 'Supercore PCE,' which measures the price of 'core services,' saw its first negative reading since COVID. The latest inflation reading shows that President Trump's tariff policy has not negatively impacted prices (at least yet.) With PCE near the Fed's 2% target, investors should expect rate cuts in 2025 – a bullish development for stocks. Bull markets are driven by high-growth industries, and currently, the industry with the most innovation and the highest growth potential is the artificial intelligence (AI) space. Within the AI industry, Nvidia (NVDA), thesemiconductor leader, is the most important stock. In fact, without Nvidia's GPUs, it's impossible to be an AI leader. The company's earnings report in late May showed that there is plenty of room for the industry left to grow. Revenue bolted 69% year-over-year to $44 billion despite a $4.45 billion charge attributed to H20 product export restrictions to China. Despite the uncertainty in the macro trade environment, Zacks Consensus Analyst Estimates suggest that top and bottom-line growth will continue to grow at a healthy clip in the mid-double-digits. Image Source: Zacks Investment Research Meanwhile, other AI industry leaders echo Nvidia's significant growth. For instance, fellow AI leader and recent IPO CoreWeave (CRWV) reported Q1 revenue of $982 million, a fourfold year-over-year increase. Meanwhile, the Amazon (AMZN) AWS Chief reported Friday that AI cloud sales have reached multiple billions. Bitcoin and bitcoin proxies like iShares Bitcoin ETF (IBIT) have been valuable tools for investors to leverage as a leading indicator. For instance, IBIT topped on December 17th, 2024, well before the S&P 500 Index topped in February 2025. Now, IBIT is breaking out to new highs well before the major US equity indices. Could they follow next? Image Source: Zacks Investment Research Meanwhile, other risk-on areas of the market are showing that the 'animal spirits' are alive and well. For example, quantum computing leader D-Wave Quantum (QBTS) is up nearly 70% year-to-date. Image Source: Zacks Investment Research The general market exhibits a massive change of character over just the past month or two. For instance, Friday, President Trump said on social media that 'China's has totally violated its agreement with the US.' Earlier in the year, stocks would have plunged on this news. However, this time, the market opened lower by around 1%, only to quickly find buyers and finish the session green. Brushing off bad news is a hallmark of a bull market and is a subtle clue for savvy investors that the market is resilient. Now, the S&P 500 is setting up a picture-perfect daily bull flag pattern. Image Source: TradingView Bottom Line The confluence of strong economic indicators, the AI revolution, and the market's resilient behavior point to a market where bulls are in control. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Inc. (AMZN) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report D-Wave Quantum Inc. (QBTS) : Free Stock Analysis Report CoreWeave Inc. (CRWV) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
