Washington, DC, May 28--Personal incomes grew in April at twice the rate of spending, boosting the savings rate to the highest level since last summer.
Personal income increased by 0.6% last month, after an unrevised 0.4% gain in March, the Commerce Department said Friday. Spending advanced 0.3%, after rising a revised 0.5%.
Economists had expected income to grow by 0.5%, and for spending to climb by 0.2%, according to a survey by Dow Jones Newswires and CNBC.
The increase in income was the largest monthly gain since November's 0.6% advance. Disposable personal income, or income after taxes, climbed 0.5%, following a 0.4% advance in March.
Consumer spending is important to economic growth; it is responsible for about two-thirds of gross domestic product.
Spending on durable goods, big-ticket items such as cars and appliances, rose 0.8%; outlays on nondurable items such as food and clothing slipped 0.1%. Spending on services grew
0.5%.
Personal saving as a percentage of disposable personal income was 2.4% in April, the highest rate since the 2.7% recorded in August 2003.
Inflation measures in the report were mixed. A price index for personal-consumption expenditures excluding food and energy rose in April from March at a 0.1% rate, lower than February's 0.2% increase.
In annual terms, however, personal-consumption expenditures less food and energy rose 1.4% in April, higher than March's year-over-year climb of 1.3%.
