US personal income up more than expected but spending weaker

US personal income rose 0.4% in March after nudging up a downwardly-revised 0.1% the month before, according to the Commerce Department.

Economists had been expecting a 0.3% increase.

Meanwhile, spending rose by a seasonally-adjusted 0.1% versus expectations for a 0.2% increase. February’s figure was revised up to a 0.2% gain from 0.1% previously.

The core PCE price index edged up 0.1% in March following an upwardly-revised 0.2% rise in February, in line with estimates.

Pantheon Macroeconomics said spending was hit by temporary weakness in autos and utilities and will rebound in the second quarter.

Capital Economics said: “Personal spending growth in February was revised up to a 0.3% m/m increase. Nonetheless, the March spending figure is still disappointing considering that real disposable income increased by a healthy 0.4% m/m last month.”