Americans were hesitant to open their wallets last month despite swelling incomes, with spending growth slowing in a sign of the economy’s weak start to the year.
Consumer spending rose just 0.1% in March, down from an upwardly revised 0.2% increase the previous month, the Commerce Department said Friday. The latest figure was below economists’ forecasts.
But personal income increased more than expected. Incomes rose 0.4% last month, up from a downwardly revised 0.1% gain in February.
Consumers opted to save more of their higher income instead of spend it amid concerns about the U.S. economy.
The percentage of disposable income saved increased to 5.4% last month, the highest rate in more than a year.
Consumer spending accounts for about two-thirds of U.S. economic activity, and the March data are in line with Thursday’s government report of weak 0.5% economic growth in the first three months of the year.
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