Something for everyone: consumption and incomes flat, consumer sentiment up, and some energy in manufacturing. But don't miss the core inflation down at 1.3%, the lowest level since the mid sixtees. Still that one step forward, two steps back feel about things.
Consumer spending faltered while incomes were flat in April, government figures showed on Friday, raising worries that Americans may be hunkering down and hurting the economy's most crucial source of growth.
But other reports provided hope the economy may be pulling out of its current "soft patch," as the Federal Reserve (news - web sites) has described it. Consumer sentiment bounced to its highest level in nearly a year in May, while a closely watched gauge of Chicago-area manufacturing showed growth in May for the first time in three months. That upbeat news gave stocks a boost heading into the weekend, with the Dow Jones industrial average rising 1.7 percent while the benchmark 10-year Treasury yield, which moves opposite to price, rose to 3.41 percent. With analysts focusing on the threat of a further decline in already low inflation due to the economy's sluggishness, Friday's data also showed the central bank's favored gauge of core inflation eased in April to just a 1.3 percent annual rate -- its slowest clip since the mid-1960s, excluding a few errant months. Some economists said the slowdown in inflation, something the Fed has said it is watching closely, increased the odds central bankers will respond by cutting interest rates in late June in its aggressive effort get the economy recharged. That would be its 13th cut since January 2001.
Source: Financial Times
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