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 16,880.36 -31.75 -0.19%
Nasdaq 4,462.90 0.00 0.00%
S&P 500 1,970.07 0.12 0.01%
Treasuries 2.55 0.09 3.74%
Data as of 4:24am ET
Company Price Change % Change
Bank of America Corp... 15.58 0.24 1.56%
Genworth Financial I... 13.98 -2.28 -14.02%
Facebook Inc 74.68 0.97 1.31%
Pfizer Inc 29.26 -0.21 -0.71%
Apple Inc 98.15 -0.23 -0.23%
Data as of Jul 30

Sections

The case involves bad mortgages sold by Countrywide Financial ahead of the Great Recession and its multi-billion dollar rescue by Bank of America. More

The case involves bad mortgages sold by Countrywide Financial ahead of the Great Recession and its multi-billion dollar rescue by Bank of America. More

Restrictive immigration policies prevent talented entrepreneurs from launching businesses in the U.S. So, they're moving to Canada. More

The Mason family, which has been struggling to pay the $100,000 student loan bill they were left with when their daughter passed away five years ago, is now seeing an outpouring of support. More

Market indexes 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. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.