Consumer spending, the driver of the US economy, edged up for a second straight month in March while personal income stagnated. The Commerce Department reported Thursday spending rose 0.4 per cent after a revised 0.2 per cent gain in February. The February increase was previously estimated at 0.1 per cent. Spending by consumers accounts for more than two thirds of the US economy; the March increase slightly missed expectations. Personal income rose less than one per cent after gaining 0.4 per ce
nt in February and 0.3 per cent in January. The March increase was the smallest in 15 months.
Disposable personal income was up marginally in March, the weakest growth since December 2013 when it fell 0.1 per cent.
The personal saving rate dropped from 5.7 per cent in February, a two year high, to 5.3 per cent in March.
Inflation remained muted, well below the Federal Reserve’s 2.0 per cent longer term target for price stability.
The Fed’s preferred inflation measure, the personal consumption expenditures price index, rose 0.3 per cent in March from a year ago. Stripping out volatile food and energy, the core PCE price index was up 1.3 per cent.
Month over month, PCE prices rose 0.2 per cent and core PCE prices were up 0.1 per cent, the same increases as in February.
AFP
