Strong Spending

Consumer spending rose 1% in April, the biggest rise since 8/09. Moreover, personal income grew a strong 0.4% and the savings rate declined to 5.4% from 5.9%. May auto sales remained strong at an annualized rate of 17.5 million, but May construction spending surprised to the downside, with residential construction spending falling, but not much. Inflation remains weak but is rising. Q2 GDP should come in above 2.5%; pretty good.