Inflated Consumer Spending

Higher prices are the main factor in increased March spending.


Consumers spent more in March, but they did not have much of a choice. The Commerce Department reported today that inflation was the main driver of consumer spending that month. Spending was up 0.4 percent, but if you exclude inflation, that number falls to 0.1 percent.

While higher prices are forcing consumers to spend more, real disposable income was slightly negative in March, decreasing by less than 0.1 percent after increasing 0.3 percent in February.

Americans also have to worry about slow growth and unemployment. The unemployment rate for April will be announced tomorrow, but one data point doesn't look good: New jobless benefit claims increased last week by 35,000.

Commerce Department