Posted: May 3, 2010 9:40 AM by Bea Karnes, News First 5
Updated: May 3, 2010 9:40 AM
Consumer spending rose in March by the largest amount in five months but the gains were financed out of savings, which fell to the lowest level in 18 months. A modest rise in incomes added to concerns that the recovery could weaken unless income growth increases more rapidly.
The Commerce Department says consumer spending rose 0.6 percent in March, matching economists' expectations. Personal incomes edged up just 0.3 percent, raising new worries about lackluster income growth.
The March surge in spending was financed out of savings, which drove the personal savings rate down to 2.7 percent of after-tax incomes, the lowest level since September 2008.