Personal income inched up 0.2% from February to March, reaching $30.9 billion while disposable personal income climbed to $20.7 billion, or 0.2%, the Bureau of Economic Analysis reported Monday.
The slim improvement in consumer spending follows continuous drops in employment rates and slight improvement in gross domestic product.
“March’s US personal income and spending figures support our view that economic growth won’t slow too sharply in the second quarter. The 0.2% m/m rise in nominal spending was hardly impressive, but in real terms spending rose by 0.3%,” said Paul Dales, senior US economist with Capital Economics.
Wages and salaries escalated $14.9 billion in March, compared to an increase of $44.6 billion in February, the bureau posted.
“The March, February and January levels of private wages and salaries were reduced by $15.0 billion (at an annual rate), reflecting the impact of accelerated bonuses in November and in December of 2012 in anticipation of changes to individual income tax rates,” said the BEA.
Dales explained, “Looking ahead, much depends on whether the slowdown in employment growth is maintained. But the recent sharp fall in the gasoline price will boost real incomes.”
“Overall, March was a sluggish month for consumer income and spending. The good news is that inflation was soft-keeping the Fed’s loose monetary policy in play,” analysts with Econoday said.
