US Personal Income and Spending Preview: Markets are watching their virus back, not the economic future

Personal Spending in the US will follow retail sales higher in May. Nonetheless, markets and USD remain focused on the pandemic threat as the economic recovery that the equities and the risk-on dollar have been banking on depends on a fully opened American economy, FXStreet’s analyst Joseph Trevisani briefs.

Key quotes

“Personal Spending measure from the Bureau of Economic Analysis (BEA) which tracks purchases at the household level is forecast to rise 9% in May following declines of 13.6% in April and 6.9% in March while  Personal Income, also from the BEA, is expected to fall 6% after soaring 10.5% in April, largely on the receipt of stipend checks from the coronavirus relief act.”

“While it is likely that the personal spending figures for May will confirm the strong showing for the US consumer evident in the retail sales figures that may matter less to markets and the dollar than the evolving pandemic picture in the United States. Markets can only look in one direction at a time. If they are watching their virus back they are not watching the economic future.”