Spending climbs for 6th straight month

By Ben Rooney, staff reporter


NEW YORK (CNNMoney.com) -- Personal spending rose for the sixth month in a row during March, while income also increased, according to government data released Monday.

The Commerce Department said individual spending rose 0.6%, or $36 billion, last month after an upwardly revised 0.5% increase in February.

Personal income climbed 0.3%, or $32.3 billion, in April following a 0.1% rise the month before.

Both figures matched estimates from economists surveyed by Briefing.com.

The report also showed that personal savings as a percentage of disposable personal income, known as the savings rate, was 2.7% in March. That's down from 3% in February and was the third consecutive monthly decline.

The increase in spending is "a good sign," according to Robert Brusca, chief economist at FAO Economics.

"The economy needs spending more than anything else right now," he said, adding that the savings rate will begin to go up once the recovery has reached "a more mature stage."

"But right now we need spending," he said. "That's what will create jobs and move the economy ahead."

The report comes after government data showed Friday that U.S. gross domestic product, the broadest measure of economic activity, rose at a 3.2% annual rate in the first three months of 2010.

The GDP report marked the third straight quarter of economic growth, confirming the view of many economists that the recession that started in December 2007 ended at some point in the middle of last year.

But the first-quarter growth rate was down from the 5.6% rate in the fourth quarter, and slightly below economists' forecasts for a 3.3% increase.

Friday's report showed consumer spending rose at a fairly modest 1.6% annual rate in the first quarter.

Consumer spending, which makes up about 70% of U.S. economic activity, has recovered from the historic lows recorded through the recession. But many economists worry that unemployment near 10% will keep consumer spending tame.

Looking ahead, the government is due to release its closely-watched monthly jobs report Friday.

Economists surveyed by Briefing.com expect the U.S. economy added 187,000 jobs in March, after a gain of 162,000 jobs in March. The unemployment rate is forecast to hold steady at 9.7%. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,804.80 26.65 0.15%
Nasdaq 4,765.38 16.98 0.36%
S&P 500 2,070.65 9.42 0.46%
Treasuries 2.18 -0.03 -1.27%
Data as of 2:14am ET
Company Price Change % Change
Bank of America Corp... 17.62 0.09 0.51%
Apple Inc 111.78 -0.87 -0.77%
General Electric Co 25.62 0.48 1.91%
Intel Corp 36.37 -0.65 -1.76%
Microsoft Corp 47.66 0.14 0.29%
Data as of Dec 19

Sections

New York Magazine reporter Jessica Pressler, who has been caught up in controversy this past week, will not be moving on to a new job at Bloomberg News. More

Investors beware: These 5 global crises are likely to rattle the stock market and world economy. More

Forums in dark corners of the web sell the kinds of hacks that befell Sony. More

Unilever sued Hampton Creek over its egg-free mayonnaise spread Just Mayo. But the company behind Best Foods and Hellman's mayonnaise has now dropped the lawsuit. More

The income of the top 1% jumped significantly in 2012, far outpacing inflation. Not only did this group make a larger share of the country's income, their share of total taxes also jumped from 35% to 38%. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.