Personal Income Increased In April; Cautious Consumers Boosted Savings Rate; Slowed Spending
The strengthening U.S. job market helped boost workers' incomes last month, but consumer spending did not rise as fast, according to government figures released yesterday.</br></br>Personal income jumped 0.6 percent in April, up from 0.4 percent in March, for the biggest monthly increase since November, the Commerce Department reported yesterday. The figures rose primarily because more people are working, not necessarily because individual workers are getting pay increases, economists said.</br></br>"Consumers do have [more] buying power, and it is coming from more jobs," said Sung Won Sohn, chief economic officer of Wells Fargo Bank, referring to the addition of more than 600,000 U.S. payroll jobs in the past two months.</br></br>However, consumers also became "a bit more cautious," last month, he said. They increased their spending by 0.3 percent in April, a slower pace than the 0.5 percent gain the month before.</br></br>Wages and salaries, the largest single component of personal income, rose 0.5 percent last month, up from 0.3 percent in March. The government also released revised figures since October and found that wage and salary growth was stronger during that period than previously reported.