Consumer Spending in U.S. Increases as Incomes Rise
Consumer spending in the U.S. climbed in March after the biggest gain since August 2009, and incomes picked up, indicating the biggest part of the economy will help sustain the expansion.
Household purchases, which account for about 70 percent of the economy, increased 0.3 percent, after a revised 0.9 percent gain the prior month that was stronger than first reported, Commerce Department figures showed today in Washington. The median estimate of 72 economists surveyed by Bloomberg News called for a 0.4 percent rise. Incomes advanced 0.4 percent, the most in three months, and the savings rate rose.
A job market that’s on the mend and warmer weather underpinned household purchases, which grew in the first quarter by the most in more than a year as sales climbed at car dealerships and retailers like Target Corp. (TGT) A pickup in hiring and wages is needed to maintain this quarter’s pace of spending.
“This report sets up fairly well for the second quarter,” said Peter Newland, a U.S. economist at Barclays Capital Inc. in New York. “What was encouraging was that the income numbers improved. Our expectation is that job growth does increase gradually” this quarter, he said.
http://www.bloomberg.com/news/2012-04-30/consumer-spending-in-u-s-increased-in-march-as-incomes-rose.html