US economic data signals firmer growth

Reasons for optimism: Employees serve customers at a McDonald’s restaurant in New York. Consumer spending was strong in April, rising 0.7% on an inflation-adjusted basis. — AFP

WASHINGTON: Firmer consumer spending and a decisive narrowing of the merchandise trade deficit show the US economy is emerging in short order from a first-quarter pothole.

Sustaining that momentum later this year is more of a question mark as manufacturing and housing soften along with employment and wage growth. Inflation, while easing a bit, remains elevated and the Federal Reserve (Fed) will continue to press harder on the monetary policy brakes.