Personal income rose less than expected in March while spending
was flat, according to the Bureau of Economic
Personal income rose 0.2%, missing the forecast for 0.3% growth.
Consumer spending was forecast to grow by 0.2%, according to
Although spending on services — the largest sector of the economy
— rose, this was partially offset by a drop in the auto industry.
On Friday, the advance report on
first-quarter GDP showed that
consumer spending rose just 0.3%, the lowest since Q4
2009. Lower spending on durable goods, especially vehicle and
parts dealers, was a major contributor to the fall.
The report also included data on personal consumption
expenditures, a gauge of consumer purchases that the
Fed prefers to measure inflation. The PCE deflator fell
0.2% month-on-month and rose 1.8% year-on-year, slipping
from 2.1% in February, which was the first time it
exceeded the Fed’s 2% target in five years.
Excluding the volatile costs of food and energy, core PCE fell
0.1% month-on-month and pulled back to 1.6% year-on-year from