Consumer spending rose 1% in April, the highest increase this year and since the great recession, as disposable income increased 0.5%. The higher spending went to purchases of durable goods primarily motor vehicles and parts. Private wages and salaries rose $37.2 billion in April compared to an increase of $27.6 billion in March while government wages and salaries grew $1.4 billion from an increase of $3.1 billion in March. Consumers also saved less; the savings rate declined to 5.4% in May—the lowest level this year—from 5.9% in March.

The job market showed cracks despite unemployment falling 0.3% to 4.7 percent in May. Nonfarm payroll only marginally increased (+38,000) driven by gains in healthcare. Healthcare added jobs in ambulatory health care services, hospitals, and nursing care facilities. In contrast, mining and manufacturing continued to post losses while retail, construction and financial activities were little changed. The labor force participation rate fell to 62.6% in May from 62.8% in April. The total unemployed rate (U-6)—the unemployment rate including discouraged, part-time & marginally attached workers—was unchanged at 9.7% from April.

Crude Oil fell 1.18% this week to close at $48.75 following another unsuccessful OPEC meeting to curb production. However, it is holding near the $50-price on continued disruptions and reduced production from non-OPEC producers. Total commercial petroleum inventories (including the Strategic Petroleum Reserve) declined 0.13% to 2,060.2 million barrels from 2,062.9 million the previous week. Consequently, the regular retail national average gasoline price rose to $2.339 from $2.300 per gallon the preceding week.