The Commerce Department said on Monday spending rose 0.6 percent after rising by an upwardly revised 0.5 percent in February, previously reported as a 0.3 percent gain.
The data was reflected in the first-quarter gross domestic product report that was published on Friday.
Analysts polled by Reuters had expected consumer spending, which normally accounts for over two-thirds of U.S. economic activity, to increase 0.6 percent in March.
Consumer spending is recovering and in a broader context, the leadership in the recovery is transferring to the consumers from corporations even with a depressed job market, said Guy Lebas, fixed income strategist at Janney Montgomery Scott in Philadelphia.
U.S. stock index futures held gains after the report, while Treasury debt prices hovered at lower levels. The U.S. dollar held gains versus the euro.
Government data on Friday showed spending grew at a 3.6 percent rate in the January-March period, driving the overall economy's 3.2 percent growth pace during the period.
Analysts, however, worry that an unemployment rate close to 10 percent and sluggish income growth could constrain spending in coming months.
According to a Reuters survey, nonfarm payrolls likely increased by 200,000 in April, adding to the prior month's 162,000 gain. The unemployment rate is, however, expected to remain unchanged at 9.7 percent for a fourth month.
The employment report is due for release on Friday.
Spending adjusted for inflation increased 0.5 percent in March after a similar gain the prior month, the Commerce Department said. Personal income rose 0.3 percent following a 0.1 percent gain in February.
That was in line with expectations for a 0.3 percent rise.
Real disposable income increased 0.2 percent in March after being flat the prior month. With consumers increasingly tapping their savings to fund consumption, savings fell to an annual rate of $303.9 billion, the lowest level since September 2008.
The saving rate dropped to 2.7 percent, also the lowest level since September 2008. The report also showed the personal consumption expenditures price index, excluding food and energy, rising 1.3 percent in the 12 months to March.
The index, which is a key inflation gauge monitored by the Federal Reserve, increased 1.3 percent in February.
Separately, U.S. small and medium-sized businesses are increasing borrowing and keeping up with repayments on existing loans, PayNet Inc said.
The Thomson Reuters/PayNet Small Business Lending Index, which measures the overall volume of financing, rose 4 percent in March, the first year-on-year gain since October 2007, two months before the recession began.
(Reporting by Lucia Mutikani; Additional reporting by Richard Leong in New York and Ann Saphir in Chicago; Editing by Andrea Ricci)