Final demand has remained strong through May in spite of higher inflation fears.

Despite the surge in inflation, the personal spending and income data from April was strong. Personal consumption expenditures grew by 0.9% for the first month of the second quarter. Even after adjusting for higher prices, consumer spending increased by 0.7% and is up 2.8% on a year-over-year basis. This represents 70% of total Real GDP indicating a strong second quarter increase is probable. Some of this better result for the month was due to the drop in inflation in April from the prior months. The core PCE price index was reported as having risen by 0.3%, the same growth reported in the prior two months. It has risen 4.9% in the past year which is down from the 5.2% YOY increase reported through March.