Despite stagnant wages, consumer borrowing has dropped off in recent months, to the surprise of forecasters.

The core US Consumer Price Index (excluding food and energy) rose just 0.1% in April, vs an expected rise of 0.2%, largely due to unexpected declines in used car prices, airline fares and hotel costs. All of these reflect consumer reluctance to spend at higher prices.

The fall in airline fares is noteworthy given the recent increases in the oil price, one of the airline’s biggest costs. Used car prices fell by 1.6%, the largest monthly decline in almost ten years, wiping out the entire price gain in the category since last September. Hotel prices are set by internet booking and reflect short-term changes in consumer demand (unlike rents, which change in the BLS measure only as new contracts are signed).

Not much need be made of one month’s consumer price data, to be sure, but the tame result is consistent with the slow rate of growth of average hourly earnings, which came in last month below consensus expectations at just 2.6% year-on-year, barely above the rate of inflation. Real wages have been stagnant, and consumers made up the difference by borrowing. During the last several months, though, the rate of consumer borrowing, especially for the revolving credit (credit cards and merchant credit) used to buy consumption goods other than homes, has declined sharply, to the surprise of most US forecasters.

That suggests a sluggish consumer in the second quarter, somewhat lower than expected GDP growth, and softness in some consumer prices. The Federal Reserve is likely to maintain a very gradual course of monetary tightening, and US term yields are likely to range-trade for the time being.