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.