NEW YORK (Reuters) - U.S. household income rose in March by the most in three months although consumers socked away part of the extra cash by saving more and only modestly increasing spending.
TOM PORCELLI, CHIEF U.S. ECONOMIST, RBC CAPITAL MARKETS, NEW YORK
“I do not think there was that much here as most of this was known thanks to Friday’s GDP report. We already know that spending was decent in the first quarter and this rounds out the information that was lacking on Friday. At the end of the day there is not a whole lot here. How much of the spending in the first quarter was due to warm weather is the big question.”
“The trend is good from the perspective that incomes are outpacing spending, so we don’t see consumers dipping into savings as much. Of course, markets like increased spending, but in this situation it’s a healthy trend in terms of reducing household debt levels. Also, inflation pressures remain somewhat muted. For the central bank, there’s nothing too inspiring in these numbers, though they do keep alive the possibility of QE3.”
TODD SCHOEN BERGER, MANAGING PRINCIPAL AT THE BLACK BAY GROUP IN NEW YORK
“This is decent overall but nothing amazing. The spending number is an indication that the higher gas prices we saw last month are taking their toll.”
Americas Economics and Markets Desk; +1-646 223-6300