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The Commerce Department said on Thursday that
consumer spending increased 0.4 percent last month after rising
0.2 percent in February. While households increased purchases of
big-ticket items like automobiles, warmer weather reduced
spending on utilities.
Economists polled by Reuters had forecast consumer spending,
which accounts for more than two-thirds of U.S. economic
activity, increasing 0.5 percent last month.
When adjusted for inflation, consumer spending rose 0.3 percent
in March after being flat in the prior month.
The data was included in Wednesday's first-quarter gross
domestic product snapshot, which showed the economy growing at
only a 0.2 percent annual pace after a 2.2 percent rate in the
fourth quarter.
The economy slowed to a crawl as it struggled with severe winter
weather, a now-settled labor dispute at normally busy West Coast
ports, a strong dollar and lower energy prices, which have cut
into domestic oil production.
The Federal Reserve on Wednesday acknowledged the first
quarter's sharp growth moderation, but dismissed it as partly
the result of transitory factors.
Spending last month picked up despite personal income being
flat. While savings slipped, they remained at lofty levels,
which should fuel future consumer spending.
Inflation pressures remained benign. A price index for consumer
spending increased 0.2 percent after a similar gain in February.
In the 12 months through March, the personal consumption
expenditures (PCE) price index rose 0.3 percent.
Excluding food and energy, prices rose 0.1 percent for a third
straight month. The so-called core PCE price index increased 1.3
percent in the 12 months through March.
(Reporting by Lucia Mutikani; Editing by Paul Simao)
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