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REFILE-US consumer spending up 0.6 pct in March
May 3, 2010 / 12:37 PM / 7 years ago

REFILE-US consumer spending up 0.6 pct in March

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WASHINGTON, May 3 (Reuters) - 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 2008.

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)

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