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Stocks headed into the long weekend on a high note with all three major indexes posting gains for the week for the first time in a long time. As a a reminder, markets will be closed this Monday, May 30, for Memorial Day.
Boosting investor sentiment today was the latest inflation update, with this morning's report from the Commerce Department showing that the core personal consumption expenditures (PCE) price index - which excludes energy and food prices - rose 4.9% annually in April. While this pace is still elevated, it's down from the 5.2% year-over-year rise seen in March.
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Separate data showed consumer spending was up 0.9% sequentially last month. However, the personal savings - or, savings as a percentage of disposable income - rate fell to 4.4% from March's 5.0%.
The drop in the savings rate indicates "U.S. consumers are now starting to chip away at those much-ballyhooed excess savings [accumulated during the pandemic], to help pay for the spurt in food and energy costs," says Douglas Porter, chief economist at BMO Capital Markets.
But even with that money already spent, there's still an estimated $2.3 trillion, or more than 9% of gross domestic product, in savings, he adds. "True, they are not well distributed across income cohorts - hence the wildly differing experiences by varying retailers. But, even if just a third of these pandemic savings are spent, this will readily support overall outlays through 2023," Porter says.
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A round of well-received earni
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