INSTANT VIEW: U.S. personal spending rose in April

NEW YORK (Reuters) - Personal spending rose by 0.2 percent in April as forecast and a key measure of inflation moderated, government data on Friday showed.

KEY POINTS: * Personal spending, under scrutiny as a barometer of how consumers are faring as the U.S. economy cools, had risen by 0.4 percent the previous month. * The Commerce Department said that personal income was up 0.2 percent in April, also matching forecasts, following an upwardly revised 0.4 percent increase in March. * This was previously reported as a 0.3 percent rise. But adjusted for inflation, income stagnated in April for the second straight month. * The overall personal consumption expenditures price index was up 0.2 percent in April from a 0.3 percent increase the month before, the Commerce Department said.

COMMENTS:

MICHAEL SHELDON, CHIEF MARKET STRATEGIST, RDM FINANCIAL,

WESTPORT, CONNECTICUT:

"It's not a real barn burner. Going forward I think investors are focusing on two aspects of the report. One is changes in the inflation rate, specifically the core PCE year-over-year rate, which is right in line with expectations. The other is the relationship between growth in salaries compared with inflation. If inflation starts to rise above growth rate of wages, this will be a bad sign in terms of the outlook for consumer spending. Overall I don't think this will be a major market mover, but one thing to pay attention to is that wages and salaries actually fell 0.2 percent and real personal spending was flat on a month-over-month basis. If these trends continue, that would support the thesis we're likely to see lackluster consumer spending in the months ahead."

SCOTT BROWN, CHIEF ECONOMIST, RAYMOND JAMES & ASSOCIATES, ST

PETERSBURG, FLORIDA:

"The inflation data is pretty mild. Some of that I think reflects seasonal patterns. Treasury prices are up a little bit. The numbers were not quite as bad as they could have been. Core PCE is important because the Fed is still looking for evidence that higher food and energy prices are feeding through

to core inflation at the consumer level. There is not that much evidence yet. (But) the Fed certainly will not be cutting rates any time soon."

RICHARD DEKASER, CHIEF ECONOMIST, NATIONAL CITY CORP.,

CLEVELAND:

"In summary, consumer spending is slowing due to a combination of factors -- slowing income growth, higher energy prices and a greater propensity to save. The slowing income gain is due to a weakening job market."

"We have a challenged consumer, but we have help on the way with the refund checks which will be significant in the summer months. We are going to have to see whether we see that happen in the upcoming retail sales numbers."

"I do see an air pocket after the refund checks are spent. What makes me optimistic is that it buys us some time. The housing correction will be further along and less of a drag on growth."

JOHN CANAVAN, ANALYST, STONE & MCCARTHY RESEARCH ASSOCIATES,

PRINCETON, NEW JERSEY:

"There was nothing particularly surprising. The numbers overall were near enough to expectations that they will do little to change things."

MICHAEL WOOLFOLK, SENIOR CURRENCY STRATEGIST, BANK OF NEW YORK

MELLON, NEW YORK:

"The focus right now is on oil prices which are a little bit higher on the day after breaking below $125 a barrel overnight. We have seen however, a GDP report from Canada that was much weaker than expected for the first quarter which has pushed the dollar higher against the loonie. The U.S. data on personal income and spending is in line with expectations broadly. Core inflation figures remain under control. The personal income and spending report is unlikely to have much impact on the dollar however it fits in nicely with recent data reflecting a bottom has been put in for the dollar."

MARKET REACTION: * BONDS: U.S. Treasury debt prices extend gains * CURRENCIES: U.S. dollar rises versus yen and euro * STOCKS: U.S. equity index futures add to gains * RATE FUTURES: U.S. short-term interest rate futures were unchanged, pricing in a 2 percent probability of a 25 basis point rate cut at the Fed's June meeting.

POLL STORY: US April personal spending seen up 0.2 pct