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How Much Of April's Retail Spend Came From Savings And Cards?


April's (and March's upwardly revised) retail sales figures were solid enough to warrant a potential upgrade of GDP estimates in both Q1 and Q2 via consumption. That's despite high inflation boosting the nominal readings, as real gains were seen robust regardless.

  • One question that will linger is how healthy the underlying consumption dynamics are, given that it appears that consumers are increasingly borrowing and dipping into savings to make purchases.
  • The answer will have to wait for a few more weeks, as we only have March data on those dynamics so far.
  • The Federal Reserve data shows revolving credit - which includes credit card debt - rose in March by the most since 1998 (at +35.3% annual rate - see chart). Meanwhile, the personal savings rate in March (6.3%) was the lowest since December 2013, continuing to move down vs COVID stimulus payment-fuelled highs.

Source: St Louis Fed FRED, MNI

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