According to data released by the US Commerce Department on Monday, consumer spending and personal income rose in March, both indicators increasing by 0.4% in line with expectations and confirming recent trends. The rise compares with an 0.6% uplift in February.
Interpretations of the data vary. The Panglossians see it as confirmation of a steady improvement in consumer confidence and concomitant retail growth; whereas gloomy Gus-types focus on the slower pace of spending – especially when spend on durables (autos, in particular) is excluded from the equation.
Car sales, surfing on a tidal wave of discounting, account for a large chunk of spending on consumer durables. As economist Rory Robertson points out: “In December, consumption ex-durables grew by 1%, going down to 0.3% in January, 0.3% in February and 0.1% in March.”
The prognostication from Robertson’s crystal ball? “I think we're set for subdued growth in consumer spending in Q2 ... the best the economy is going to do is 'OK'.”
Data sourced from: Financial Times; additional content by WARC staff