US consumer spending stalls in March

US consumer spending stalled in March while inflation slowed to below the Federal Reserve’s target, showing the biggest part of the economy might take more time to gain momentum after a tepid start to the year. Purchases were little changed in both March and February from their prior months, Commerce Department figures showed Monday.

The median forecast of economists in a Bloomberg survey called for a 0.2 per cent advance. Incomes rose 0.2 per cent, with falling prices applying a drag on the nominal figures. The figures were foreshadowed in Friday’s report on gross domestic product that showed the slowest first quarter for household spending since 2009. Analysts are expecting spending to bounce back, as there’s still plenty for Americans to cheer about in the economic outlook, including a steady job market.

“Consumers still have a lot going for them: a tightening labor market with rising income growth, solid consumer confidence readings, a strong assist from rising stock and home prices, and mortgage rates that have fallen back since the March highs,” Scott Anderson, chief economist at Bank of the West in San Francisco, said in a research note before the report.

Bloomberg