WASHINGTON – U.S. consumer spending in April posted the weakest performance in three months, but a solid gain in income growth should help boost spending in the future.
The Commerce Department says consumer spending was flat in April after a revised 0.5 percent increase in March, which had been the biggest gain since last August. Personal income rose a healthy 0.4 percent after being unchanged in March.
The flat reading for consumer spending in April had been expected given weakness previously reported in retail sales and auto sales for the month. Economists, however, forecast that spending will rebound in coming months. Strong gains in employment should translate into more confident consumers who are willing to spend more.
Consumer spending is closely watched because it accounts for 70 percent of economic activity.