March Spending Rate Lower Than Anticipated

By John S. McClenahen Take-away price changes and consumer spending in March rose just 0.1% reveal the latest data from the U.S. Commerce Department. Economists generally were expecting a 0.7% increase. In fact, if you subtracted March's 1.6% increase in real spending on manufactured durable goods -- mostly autos -- inflation-adjusted consumer spending would have been down for the second straight month, notes Gerald D. Cohen, a senior economist at Merrill Lynch & Co., New York. And "while spending looks like it picked up somewhat in April, it's too early to say how much of a post-war bounce we are getting," Cohen adds. Wage and salary data show manufacturing payrolls increased $100 million in March to $758.2 billion, a turnaround from their $400 million decline in February. Finally, Fed Chairman Alan Greenspan's favorite measure of inflation, the personal consumption expenditure deflator, rose only 0.1% in March. But that was moving the opposite direction from its 0.4% decrease in February.

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