Wall Street Journal (04/30/13) Jeffrey Sparshott; Sarah Portlock
U.S. consumers increased their spending in March, according to the U.S. Department of Commerce, but part of the spending was due to high heating bills. Personal spending—including such things as clothing, health care, and heating—ticked up 0.2% last month. Economists had expected spending levels to remain flat. However, slow income growth suggests consumer spending may not boost the economy much in the coming months.
“The weakness of spending on goods in recent months…is the underlying story. Fiscal tightening is hurting,” says Ian Shepherdson, chief economist at Pantheon Macroeconomic Advisors.
“Given the expected softer pace of consumer spending, gross domestic product growth will likely be held around 1.0% in the second quarter,” says Eugenio Aleman, senior economist at Wells Fargo.