More importantly, real disposable personal income...was up a much more humble 0.1%...real consumption growth in April was 0.2%. Thus, Americans continue to increase their consumption faster than they are increasing their disposable income.
Some moderation in the rate of consumer spending is likely. The University of Michigan's measure of consumer sentiment fell to 86.9 in May from 87.7 in April. The final reading for May was higher than the preliminary reading of 85.3 reported two weeks ago.
In Japan, however, there is more evidence that consumer spending is picking up. According to the Ministry of Economy, Trade and Industry, Japan's retail sales rose 3.9 percent in April from a year earlier, the sharpest rise in eight years.
Japan's deflation also continued to moderate. Although core consumer prices in Japan edged down 0.2 percent in April from a year earlier, month on month, the core consumer price index rose 0.3 percent, the second consecutive month it has increased, while core consumer prices in Tokyo, a leading indicator of nationwide inflation, rose 0.2 percent in May from April.