WASHINGTON, April 28 (UPI) -- The Commerce Department said Monday that personal income rose 0.4 percent in March while personal spending also improved 0.4 percent to $7.526 trillion at an annual rate.
Economists on Wall Street were expecting personal income to rise 0.4 percent after rising 0.2 percent in February and 0.4 percent in January. Personal spending was expected to rise 0.6 percent after rising 0.1 percent in February and posting an unchanged performance in January.
Personal income is the dollar value of income received from all sources by individuals. Personal outlays include consumer purchases of durable and non-durable goods, and services.
The consumption (outlays) part of the report is even more directly tied to the economy, which usually dictates how the markets perform. Consumer spending accounts for two-thirds of the economy.
The latest report showed the gain in spending was paced by the first increase in three months in purchases of durable goods, or items made to last at least three years, which rose 1.6 percent in March after falling 1.5 percent in February.
Purchases of non-durable goods dropped 0.2 percent during the month after declining 0.7 percent during the previous month.
Spending on services, which make up half the report, declined 0.1 percent after being unchanged in February.
Wages and salaries rose 0.5 percent to $5.126 trillion and the personal consumption expenditures index, a measure of inflation watched by Federal Reserve Chairman Alan Greenspan, rose 0.3 percent.
The Commerce Department also reported the personal savings rate declined to 3.6 percent from 3.7 percent in February.
The indicator weighs current income from wages, salaries, businesses and government payments against spending. It doesn't account for borrowed money, income from investments, or withdrawals from prior savings.
