3 Reasons to Utterly Ignore the Bad News on Consumer Spending
The U.S. government reported that spending by consumers fell 0.1% in April, an $8.1 billion drop and the first decline in a year. It missed forecasts of a 0.2% gain.
Still, there are three reasons to discount the spin saying the number points to slower-than-expected growth at midyear.
1. The weather did it.
Sounds weird to still be talking polar vortex after Memorial Day but even if your idea of summer whites is sweat socks it's still true.
Look, consumer spending rose $117.6 billion in March -- a full percentage-point gain, the biggest since 2009. Why? Because it rose just 0.2% in January and 0.1% in December, when people were stuck at home in big swaths of the nation. In parts of February and March, Nanook of the North emerged from his igloo -- which, strangely, seemed to have journeyed as far south as Atlanta in January winter -- and spent pent-up money. In April, Nanook North (and Susie Southeast) reverted to the mean.
At the time of publication, the author held no positions in any of the stocks mentioned. Follow @timmullaney This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV