The Capital Economics, US Economics Weekly Bulletin focused on the weakness of real consumption during the first quarter this week, (20th April 2015) despite falling energy prices.
Real consumption
After several months of weather-related weakness, retail sales rebounded 0.9% m/m during March but this wasn’t enough to convince the markets that the US economy was getting back on track.
“The slump in energy prices triggered a big surge in households' purchasing power between November and February. Nominal household spending on gasoline fell by $110bn annualised. The problem is that, while the drop in prices generated a surge in real incomes, households have shown no...
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