Americans' incomes continue to rise sharply without fuelling inflation
Americans' incomes continue to rise sharply without fuelling inflation
Household personal income in the US rose by 0.8% in April, following increases of 0.7% and 0.8% in the previous couple of months. This is the fourth consecutive month that the figure has exceeded analysts' average expectations, which were 0.3% this time. Meanwhile, we have become accustomed to the much more modest spending increase of 0.2% last month. Consequently, a growing proportion of income is being saved, reaching 4.9%, close to the 25-year average of 5.6%. This normalisation has been made possible by the slowdown in inflation, but it is also contributing to a further slowdown.
For example, the core personal spending price index slowed to 2.5% year-on-year, a four-year low. The data matched expectations, maintaining the slowdown trend and steadily approaching the Fed's 2% target. As the data was as expected, there was no sharp immediate reaction from the stock or currency markets. However, this news should reinforce the dovish stance of Fed members and bring the date of the next rate cut closer, as it has been moving further away since last November.
By the FxPro Analyst Team
Weekly Analysis: Wall Street Drops as Brent Crude Breaks Above $100, Reviving Inflation Worries
The crypto market has retreated to support levels while awaiting data
Week Ahead – Fed, BoJ and BoE decide amid inflation dilemma
Dollar gains as US PPI data bolster Fed hike bets
Markets Position for US CPI as Dollar Strength Builds | 11th September, 2026
UnitedHealth’s Recovery Hits a New Test as Investors Look Beyond Costs
EBC Markets Briefing | Euro resilient amid Middle East flare-up
