Consumer Spending Rebounds in March; But First-Quarter Pace Slows Overall

5/16/2017 6:22:00 PM

The Federal Reserve Bank of New York monthly U.S. Economy in a Snapshot report shows that delayed tax refund disbursements influenced spending growth rates in the first quarter this year.


Consumer spending bounced back in March compared to February, but the pace of growth in the first quarter this year slowed significantly from the fourth quarter 2016, according to the latest U.S. Economy in a Snapshot report from The Federal Reserve Bank of New York.

The real personal consumption expenditures (PCE) increased 0.3 percent in March after declines in January and February, according to the report.

The expenditures declined 0.1 percent in February and 0.3 percent in January, ACA International previously reported.

A delay in tax refund disbursments influenced, in part, the spending growth rates in the first quarter, according to the Fed.

“Despite the recovery in March, real PCE rose at a weak annual rate of 0.3 percent [in the first quarter,”] it reports.

Consumers’ real disposable income has increased since February. It declined 0.1 percent in January, increased 0.2 percent in February and 0.5 percent in March.

“Employee compensation registered a modest 0.1 percent increase in March, well below the average increase of 0.4 percent for January and February,” the Fed reports.

Their personal savings rate increased slightly from 5.7 percent in February to 5.9 percent in March.

On Wednesday, the Fed will release its first quarter Household Debt and Credit report with in-depth updates on trends in borrowing and debt, including data about mortgages, student loans, credit cards and auto loans.

U.S. Economy in a Snapshot, released monthly and launched in June 2015, is designed to provide a condensed, comprehensive overview of current economic and financial developments. It presents charts and commentary on a broad range of topics that include labor and financial markets, consumer behavior and the global economy.  

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