Why Stocks Rose Friday Despite A Rise In Inflation In April
Published Friday, May 26, 2023 at: 8:59 PM EDT
Personal consumption expenditures (PCE) sharply increased by 0.8% in April, while disposable income (DPI) rose 0.4%, as consumers continued to tap excess cash in savings accounts that were built up from government stimulus payments made in 2020 and 2021 following the pandemic.
The chart above shows the savings rate in April ticked down to 4.1%, less than the pre-pandemic rate. Meanwhile, in the 12 months through the end of April, DPI rose a sharp 7.9%, fueling a sharp rise in consumer spending of 7.3%. Even after inflation, Friday’s income and spending figures from the Bureau of Economic Analysis are strong and dispel concerns of recession.
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This article was written by a professional financial journalist for Fisher Financial Advisors and is not intended as legal or investment advice.
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