by Sheraz Mian
Today’s March Personal Income & Spending report reconfirms what we saw from the sub-par Q1 GDP report on Thursday, with the US economy barely staying in positive territory. Consumer spending in Q1 was up +1.9%, which was below the growth pace of the preceding quarter, with weakness in household spending on durable goods accounting for most of the deceleration. This morning’s spending growth number for March came in weaker than expected, partly offset by a positive revision to February’s growth pace.
The net effect of today’s spending report on the subsequent GDP revision will likely be a washout, with the March disappointment dragging it down and the February revision pushing it higher. The positive part of today’s report came on the income side, which turned out to be better than expected.