U.S. March personal incomes rise, consumers save more

Household income rose in March by the most in three months although consumers socked away part of the extra cash by saving more and only modestly increasing spending.

US consumers are spending slightly more as their incomes are rising modestly, official data showed Monday.The Commerce Department said spending rose 0.4 percent and incomes rose 0.2 percent last month.The figures were broadly in line with forecasts by economists, who had expected income to rise 0.2 percent in July and spending to increase 0.3 percent.Consumer spending is a key driver of US economic growth, usually accounting for two-thirds of output.

Despite expectations that following several months of subpar income growth offset by rampaging spending and thus a plunging savings rate, March incomes would rise by 0.4%, while spending would be flat, this did not happen, and instead both spending and incomes rose by the same amount, or 0.2% in the past month. Worse, when adjusting for inflation, real disposable income rose just 1.1% compared to last March, and just barely above the 0% breakeven. On the other side, real spending was up 2.2% Y/Y just barely above the 2% recessionary threshold.

US consumer spending growth slowed in March after a strong February, even as personal income growth picked up pace, government data showed Monday.Consumer spending, which accounts for about 70 percent of US economic activity, rose 0.3 percent in March, the Commerce Department reported.That undershot the average analyst estimate of a 0.5 percent rise.Excluding food and energy, spending rose 0.2 percent.

"Unexpected" weakness and downward revisions are hallmarks of the beginnings of recessions. And so it it with durable goods. Economists had forecast a gain, instead there was a 1.6% drop. Moreover July was revised lower as well.