Consumer spending and personal income posted strong gains in March, marking the fourth consecutive monthly increase.

The U.S. Commerce Department Monday reported consumer spending increased 0.4% for the month, following a 0.6% jump in February, while personal income increased by the same numbers.
“This is equivalent to about a 5% annual growth rate that would be consistent with a 3%-plus growth rate for the whole economy, after inflation,” says Newport Communications Senior Economist Jim Haughey.
He says, however, these numbers could indicate a trend to slowing growth over the quarter. Consumer purchases of non-durable goods that drive dry van freight grew 1.6% last December. 1.0% in January and then fell 0.1% in February and 0.4% in March.
“Optimists will focus on the four-month average that is about equal to the sustainable long-term growth rate,” says Haughey. “Pessimists will focus on the declining trend. Pessimists are wrong this time. There is nothing in the economic environment that suggests declines ahead for consumer non-durable goods spending.
The increase in consumer spending is a good indicator as to the future health of the economy, because consumer spending accounts for two thirds of economic activity in the U.S. However, because consumer spending has remained fairly strong during the latest economic downturn, some analysts say it is doubtful consumers will provide a boost to the economy as it emerges from the recession."