Thursday morning, the Commerce Department released its report on personal income and spending in the month of March, showing that income and spending both fell by a little more than economists had been expecting.
The report showed that personal income fell 0.3 percent in March following a 0.2 percent decrease in February. Economists had been expecting a slightly more modest decrease in income of about 0.2 percent.
A decrease in wages and salaries contributed to the decrease in personal income, with private wage and salary disbursements falling by $32.9 billion in March compared with a decrease of $28.8 billion in February.
Disposable personal income, which excludes personal current taxes, edged down by less than 0.1 percent in March after edging up by less than 0.1 percent in February.
The Commerce Department added that personal spending fell 0.2 percent in March following an upwardly revised 0.4 percent increase in the previous month. Spending had been expected to edge down 0.1 percent compared to the 0.2 percent increase originally reported for February.
With the modest decrease in spending, personal saving as a percentage of disposable personal income rose to 4.2 percent in March from 4.0 percent in February.
Peter Boockvar, equity strategist at Miller Tabak, noted, On a back of the envelope calculation, every 1 percentage point increase in the savings rate equals about $100 million in lost spending.
The report also showed that the Commerce Department's reading on consumer prices showed that the pace of price growth slowed to an annual rate of 0.6 percent in March from a revised 0.9 percent in February
Excluding food and energy prices, core consumer prices rose at an annual rate of 1.8 percent in March, unchanged from the rate of growth seen in the previous month.
In other economic news, the Labor Department released a report showing a notable decrease in initial jobless claims in the week ended April 25th.
The Labor Department said that initial jobless claims fell to 631,000 from the previous week's revised figure of 645,000. Economists had expected jobless claims to come in unchanged compared to the 640,000 originally reported for the previous week.
At the same time, the report showed a continued increase in continuing claims, which rose to another new record high. Continuing claims in the week ended April 18th rose to 6.271 million from the preceding week's revised level of 6.138 million.
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