Personal Income Rose 0.2% in March; Cheaper Oil Seen Lifting Buying Power
WASHINGTON -- Lower oil prices are expected to spur solid gains in consumers' purchasing power in coming months despite the small increase in personal income in March.</br></br>Personal income rose 0.2% last month, following a revised 0.4% increase in February, the Commerce Department reported. Consumer spending last month increased 0.3% following a revised 0.4% rise in February. The income rise was originally put at 0.6% and the spending increase, at 0.3%.</br></br>"Income is growing very slowly," said Robert Dederick, chief economist for Northern Trust Co. in Chicago. "But thanks to the oil price cut, people are in effect getting a tax cut."</br></br>A spending-based price measure reported after a one-month lag fell 0.4% in February after increasing 0.3% in January. After adjusting for price changes, February spending rose 0.9%.</br></br>"Once you get the low inflation numbers factored in, the numbers don't look so weak," said Robert Wescott, senior economist at Wharton Econometric Forecasting Associates in Philadelphia. He noted that consumers also are benefiting from the decline in interest rates.