U.S. Consumer Spending Down In April
May 31, 2013 by UPI - United Press International, Inc.
WASHINGTON (UPI) — Consumer spending dropped 0.2 percent in April, despite expectations of a slight rise, the U.S. Commerce Department said Friday.
Economists had predicted spending to climb 0.1 percent, which would have matched March’s spending increase. Spending gains peaked in February, when spending rose 0.8 percent. Gains in January and March were modest.
As spending dropped, incomes also fell slightly — less than 0.1 percent — which caused disposable incomes to drop 0.1 percent, $16.1 billion.
Small shifts in spending are major economic news, as consumer spending makes up about 70 percent of the country’s gross domestic product, the broadest measure of the country’s economic performance.
April’s figures bring March gains back down. In March, incomes rose 0.3 percent, while disposable personal income rose 0.2 percent, or $25.4 billion.
The department said payrolls decreased $2 billion at goods-producing companies after rising $700 million in the previous month. Payrolls in April increased $3.7 billion at service-oriented firms, a relatively muted gain compared with March, when payrolls at service-oriented firms rose $15.6 billion.
Personal spending rose $21 billion in March while personal incomes increased 0.2 percent, $30.9 billion, after rising 1.1 percent in February.
Disposable income, which also rose 1.1 percent in February, was up $20.7 billion — 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 $100 million in March after rising in February.
At service-oriented jobs, payrolls increased $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.