U.S. consumer spending falls by 0.2% in March

WASHINGTON, April 30 (Xinhua) -- U.S. consumer spending fell 0.2 percent in March, the first drop in three months, while income growth slipped for a second consecutive month, the Commerce Department reported Thursday.

The March drop followed gains of 1.1 percent in January and 0.4percent in February. The back-to-back increases came after consumer spending had posted six straight monthly declines as consumers slashed outlays in the face of a deepening recession.

Economists had been expecting a 0.1 percent decline for last month.

Personal income, the fuel for future spending, dropped by 0.3 percent in March, worse than the 0.2 percent dip that had been expected. Income rose by 0.1 percent in January and declined by 0.2 percent in February.

Americans' disposable personal income, or after-tax income, was flat in March, the same as the previous month.

But Americans were saving more. The personal saving rate, personal saving as a percentage of disposable personal income, increased to 4.2 percent last month from 4.0 percent in February.

Consumer spending, which accounts for two thirds of total economic activity, rose at an annual rate of 2.2 percent in the first quarter of this year after two consecutive quarters of declines.

However, many economists believe that consumer spending will dip back into negative territory in the current April-June period as the economy is still in a severe recession and the unemployment rate stands at 8.5 percent, the highest level since late 1983.