Consumer spending flat in May as auto sales slump

Reuters

NEW YORK (Reuters) - Consumer spending was unchanged in May for the first time in almost a year, likely reflecting a plunge in auto sales, according to a government report on Monday, that also showed a build-up in underlying inflation pressures.

Chicago Fed Midwest factory activity up in May

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COMMENTS:

PETER CARDILLO, CHIEF MARKET ECONOMIST, AVALON PARTNERS, NEW YORK

"The numbers that we got today were somewhat disappointing in the sense that we're seeing a slowdown in spending, but of course we're not seeing any reversal into negative territory.

"The spending a result of 0.3 percent was just in line with what we were thinking."

"In terms of economic activity, we're in a bit of a slowdown and we're not going to see stronger numbers until maybe the second month of the quarter. So we should continue to see numbers that reflect a softer economic environment."

"In terms of the market, the market is focusing on the economic slowdown. I think we're probably going to have a mixed session for most of the day."

LOU BRIEN, MARKET STRATEGIST, DRW TRADING GROUP, CHICAGO

"This is one of those very lagged numbers so while it is an important one it's not very tradable."

DAVID SLOAN, ECONOMIST, IFR ECONOMICS, A UNIT OF THOMSON REUTERS

"May's personal income and spending report suggests that in real terms both series are going to produce barely positive outcomes in the second quarter, and while lower energy prices and fading of short term supply issues in the auto sector may allow some improvement in Q3, the data does show that core inflationary pressures have gained some momentum. While there are no major surprises, there is little good news in this report."

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