Economists had expected spending to be flat for the month after rising 0.7 percent in February.
Although the spread between expectations and the actual gain appear small, consumer spending accounts for an estimated 70 percent of the country's gross domestic product, which means small differences add up.
Investors consider economic forecasts and when economic data later differs they adjust their positions accordingly.
Personal spending rose by $21 billion in March while personal incomes increased 0.2 percent, or by $30.9 billion, after rising 1.1 percent in February.
Disposable income, which also rose 1.1 percent in February, was up by $20.7 billion, or 0.2 percent, in March, the department said.
Wages rose for the second consecutive month, gaining $14.9 billion in March after a solid $44.6 billion gain in February. Wages at manufacturing jobs fell by $100 million in March after rising in February.
At service-oriented jobs, payrolls increased by $15 billion after a jump of $29.5 billion in the previous month.
Personal savings in March totaled $329.1 billion, down from $330.9 billion in February. The savings rate -- personal savings as a percentage of disposable income -- rose to 2.7 percent from 2.6 percent, the department said.