The U.S. Bureau of Economic Analysis last Friday released a monthly report showing consumer spending rose by $80.3 billion, or 0.5%, in April, after a $112.6 billion boost for services helped offset a $32.3 billion decrease in expenditures on goods.
The spending increase followed a bigger 4.7% jump in March, a surge attributed to the arrival of federal pandemic relief funds.
Consumers have been spending more this year as vaccines roll out, and inflation is beginning to stir. The annual inflation rate in the U.S. soared to 4.2% in April from 2.6% in March, well above market forecasts of 3.6%.
Spending rose for a variety of services, including haircuts, airline flights and restaurant meals, as economies began to reopen with the rollout of vaccines against the coronavirus.
Consumer spending powered ahead at a 11.3% annualized rate in the first quarter, contributing to the economy’s 6.4% growth pace.