Inflation has been non-existent in the past two months due to the coronavirus induced shutdown of the U.S. economy. The inflation reading Core PCE fell to 1% annually in April, down 0.5% monthly from March. Personal Spending fell by 13.6% while Personal Incomes rose 10.5%. The personal savings rate surged a record 33% as most Americans were under lock down and didn't spend much. In addition, Personal Incomes surged boosted by government payments.
Consumer Sentiment inched higher in May as the pandemic induced shutdown began to loosen up a bit across the nation. The Consumer Sentiment Index rose to 72.3 this month from 71.8 in April. Spokesperson Richard Curtin said, " The CARES relief checks and higher unemployment payments have helped to stem economic hardship, but those programs have not acted to stimulate discretionary spending due to uncertainty about the future course of the pandemic." To put it into perspective, the index was at 101 in February.
Gas prices at the pumps have increased over the past month as the shutdown eases and drivers take to the road with the driving season upon us. The national average price for a regular gallon of gasoline has risen to $1.97 from $1.76 a month ago. Jeanette Casselano, AAA spokesperson said, “While motorists will see pump prices continue to increase, AAA does not expect the summer average to be as expensive as last year’s season.”