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Economic news
30.04.2025

U.S. consumer spending surges 0.7 per cent in March, income advances 0.5 per cent, core PCE price index remains unchanged

The Commerce Department reported on Wednesday that consumer spending in the U.S. surged 0.7 per cent m-o-m in March, following an upwardly revised 0.5 per cent m-o-m jump (from +0.4 per cent m-o-m) in February. This was the strongest monthly rise in consumer spending since December 2024 (+0.8 per cent m-o-m). Economists had expected a gain of 0.5 per cent m-o-m in March.

Meanwhile, consumer income advanced 0.5 per cent m-o-m in March after a downwardly revised 0.7 per cent m-o-m climb (from +0.8 per cent m-o-m) in the previous month. This represented the weakest monthly increase in consumer income in three months. Economists had predicted a 0.4 per cent m-o-m increase.

The March advance in personal income was mainly due to gains in compensation and proprietors’ income.

Elsewhere, the personal consumption expenditures (PCE) price index, excluding the volatile categories of food and energy, which is the Federal Reserve's preferred inflation gauge, was flat m-o-m in March, following an upwardly revised 0.5 per cent m-o-m gain (from +0.4 per cent m-o-m) in March. This marked the worst monthly performance of the core PCE price index since a decline in April 2020 (-0.3 per cent m-o-m). Economists had predicted the indicator would edge up 0.1 per cent m-o-m.

In the 12 months through March, the core PCE price index increased 2.6 per cent, decelerating from an upwardly revised 3.0 per cent (from 2.8 per cent) soar in the 12 months through February. This marked the lowest reading since June 2024 (+2.6 per cent y-o-y). Economists had anticipated an advance of 2.6 per cent y-o-y. 

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