The long list of economic headwinds failed to push back US consumers' spending in March as they opened their wallets for higher-priced food and energy and services.
The Commerce Department reported March personal consumption expenditures rose 0.4 per cent, above the 0.1 per cent rise in February.
After adjusting for higher prices, real consumer spending was up 0.1 percent compared with no change in the preceding month.
Personal income rose 0.3 per cent for the month, as expected, and down from the surprisingly high 0.5 per cent increase in February.
But after adjusting for inflation and taxes, real disposable income actually fell slightly - less than one tenth of a percentage point - which the Commerce Department reports as zero change, after a 0.3 per cent increase in February real incomes.
Core PCE inflation - excluding food and energy - rose 0.2 per cent as expected. The headline Personal Consumption Expenditure price index was up 0.3 per cent.
Compared with March 2006, the core PCE index was 2.1 per cent higher, slightly above expectations for 2.0 per cent. Year-on-year headline PCE inflation was up 3.2 per cent.
Economists had expected the personal spending numbers to be inflated by higher prices for energy, food and medical care, while the consumption increases were in the non-durable goods and services categories.
Spending on non-durables such as gasoline was up 0.4 per cent while services rose 0.6 per cent. Durable goods purchases, on the other hand, fell 0.4 per cent.
After inflation adjustments, spending on non-durables and services rose 0.2 per cent and spending on durable goods fell 0.5 per cent.