Put today’s numbers on the economy together with those in Friday’s first quarter GDP report and the picture that emerges is of a U.S. economy growing at s very solid rate with declining inflation.
But where the trends on consumer incomes and spending suggest, maybe, trouble down the road.
This morning the Bureau of Economic Analysis reported that real personal consumption expenditures, consumer spending in other words, climbed 0.7% in March after showing unchanged in February. Wages and salaries gained 0.4% in March after increasing 0.3% in February. (We get another read on this trend with the earrings data with the jobs report for April on Friday, May 3.)
Inflation, meanwhile, measured by the Personal Consumption Expenditure Index, the Federal Reserve’d preferred inflation measure, rose just 0.1% in Match. That took the annual rate to 1.5% in March, up from 1.3% in February.
On the worry side, the personal savings rate dropped to 6.5% in March from 7.3% in February. (Even after  that drop those figures are very strong for the U.S. economy.) Real disposable personal income fell 0.2% in March after being unchanged in February. Personal income rose 0.2% in March. Economists surveyed by Briefing.com had expected a 0.4% increase.
