U.S. consumers limited spending growth in March amid a lingering housing market slump and high gasoline prices, even as their personal incomes remained robust, the Commerce Department said April 30. Consumer spending rose just 0.3% in March, disappointing Wall Street analysts who had expected spending to rise at least 0.5%.
The monthly snapshot on consumer activity is closely watched as consumer spending accounts for some two-thirds of all U.S. economic activity.
Personal incomes remained solid, however, rising 0.7% for the second straight month, a couple of notches better than most economists had anticipated.
The report also showed inflation, as measured by the personal consumption expenditures price index, rose 0.4% in March for the second straight month, bringing the year-over-year increase to 2.4%.
Core inflation, which does not include volatile food and energy prices and is viewed by the Fed as a better barometer of prices, rose 0.1% in the month, in line with most forecasts. Such a reading is well inside the Fed's comfort zone.
Copyright Agence France-Presse, 2007