Personal spending and incomes raised 0.4% in April as stated by the U.S. Commerce Department. Their data stated that personal income increased $58.4B (0.4%) in April 2017, disposable income increased (DPI) $56.5B (0.4%) and Personal Consumption Expenses (PCE) also increased to $53.2B (0.4%). The Bureau of Economic Analysis (BEA) reported that the increase of personal income is based on the increase in private wages and salaries. It appears that Americans are exhibiting spending confidence which may have led to the GDP Growth estimates. According to NASDAQ.com, GDP growth estimates for the second quarter range between a rate of 2% and 3.8 percent.
Due the uptick in consumer spending, interest rate hikes may also soon be in effect. In efforts to get the economy moving, The Federal Reserve Bank has stated their predictions. According to Reuters, which remarked Federal Reserve Chairwoman, Janet Yellen, as she stated on Friday (5/26/2017) an interest rate hike would probably be appropriate in the “Coming months”. In addition to the data that the Federal reserve bank released, a rate hike was also indicated by the Dallas Federal Bank President, Robert Steven Kaplan, which stated: “Two things drive GDP: growth in the labor force and growth in productivity…The problem is labor force growth is very sluggish. And my own judgment and our economist at the Dallas Fed think it’s going to continue to be sluggish the next 10 years because the population is aging and the labor force growth therefore is slowing.” During an interview with CNBC’s “Squawk box” (5/30/2017), Kaplan also stated “My own base case is two more rate hikes for the remainder of the 2017…”