Strong gains in consumer spending and incomes in March

U.S. consumer spending rose at the fastest pace in nine months while incomes soared by a record amount in March, reflecting billions of dollars in government support payments aimed at putting the country firmly on the road to recovery

WASHINGTON — U.S. consumer spending rose at the fastest pace in nine months while incomes soared by a record amount in March, reflecting billions of dollars in government support payments aimed at putting the country firmly on the road to recovery.

Consumer spending rose 4.2% last month, the Commerce Department said Friday, the best showing since a 6.5% spending increase in June. Spending had fallen 1% in February as frigid winter weather disrupted sales.

The strong gains provided more evidence that the economy is poised for a robust recovery following last year’s pandemic-triggered recession. Economists are counting on strong consumer spending, which accounts for two-thirds of economic activity, to power a recovery this year, helped by trillions of dollars in government support, increased vaccinations which are encouraging more people to leave their homes and a surge in pent-up consumer demand.

The government reported Thursday that the overall economy, as measured by the gross domestic product,, rose at a robust annual rate of 6.4% in the January-March quarter. Many analysts believe that growth in the current April-June quarter will be even stronger, perhaps topping 10%.

The Fed at this week’s meeting kept its key interest rate at a record low of 0% to 0.25 percent and Fed Chairman Jerome Powell said the central bank will not be concerned by what it expects will be a temporary blip in inflation this spring.

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