(Adds dropped letter in first paragraph)
WASHINGTON May 3 U.S. consumer spending
increased as expected in March for a sixth straight month as
consumers dipped into their savings, a government report showed
on Monday, confirming the robust spending growth experienced in
the first quarter.
The Commerce Department said spending rose 0.6 percent
after rising by an upwardly revised 0.5 percent in February,
previously reported as a 0.3 percent gain.
The data was reflected in the first-quarter gross domestic
product report that was published on Friday.
Analysts polled by Reuters had expected consumer spending,
which normally accounts for over two-thirds of U.S. economic
activity, to increase 0.6 percent in March.
Government data on Friday showed spending grew at a 3.6
percent rate in the January-March period, driving the the
overall economy's 3.2 percent growth pace during the period.
Analysts, however, worry that an unemployment rate close to
10 percent and sluggish income growth could constrain spending
in coming months.
Spending adjusted for inflation increased 0.5 percent in
March after a similar gain the prior month, the Commerce
Department said. Personal income rose 0.3 percent following a
0.1 percent gain in February.
That was in line with expectations for a 0.3 percent rise.
Real disposable income increased 0.2 percent in March
after being flat the prior month. With consumers increasingly
tapping their savings to fund consumption, savings fell to an
annual rate of $303.9 billion, the lowest level since September
The savings rate dropped to 2.7 percent, also the lowest
level since September 2008. The report also showed the personal
consumption expenditures price index, excluding food and
energy, rising 1.3 percent in the 12 months to March. The
index, which is a key inflation gauge monitored by the Federal
Reserve, increased 1.3 percent in February.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)