WASHINGTON - Personal income increased 0.3% in March, while personal spending increased 0.6%, in line with economists’ estimates and the largest monthly increase in spending since October, the Commerce Department reported today.
Core PCE, which excludes food and energy costs, rose 1.3% for the year ending in March, the same annual rise as posted in February.
Personal income in February was revised higher to a 0.1% gain from the unchanged reading initially reported. Disposable personal income also increased 0.3% in the month.
Economists expected consumption to increase 0.6% and for income to increase 0.3%, according to the median estimate from Thomson Reuters. Personal consumption in February was revised higher to a 0.5% increase from 0.3% initially reported.
The Commerce Department on Friday reported with gross domestic product figures that core PCE increased 0.6% for the quarter, the smallest increase since the first quarter of 1959 when core PCE was flat.
Increased consumer spending drove down the personal savings rate to $303.9 billion, or 2.7%, the third consecutive monthly drop and the smallest level of savings since September 2008. The personal savings rate, the difference between disposable personal incomes and spending, had spiked amid the worst months of the current recession as consumers cut back spending and government stimulus aid boosted incomes.
