WASHINGTON, Fri Jun 1, 2012 – Consumer spending rose modestly in April while incomes grew more slowly and inflation pressures eased, according to Commerce Department data published on Friday.
Spending climbed 0.3 percent, in line with forecasts in a Reuters poll and following a downwardly revised 0.2 percent gain for March.
Incomes increased just 0.2 percent, half of March’s pace and weaker than analyst estimates.
At the same, the Federal Reserve’s preferred measure of inflation remained comfortably within the central bank’s 2 percent target, at 1.9 percent.
Gross domestic product expanded just 1.9 percent in the first quarter, following downward revisions to an initial estimate this week. The softness raised new concerns about the economy’s vigor as worries about a Europe-led slowdown persist.
Americans continued tapping into their savings to sustain their spending. The savings rate continued a recent downward trajectory, dipping to 3.4 percent in April from as high as 5 percent last summer.