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(CEP News) - U.S. Consumer Spending fell in March as a weak labour market continues to have a negative impact on personal income, the Bureau of Economic Analysis reported on Thursday.
U.S. Personal spending fell 0.2% in March after last month's revised 0.4% increase and worse than the expected 0.1% fall. Personal income also fell more than forecasts, decreasing by 0.3% in March after last month's unrevised 0.2% decline and -0.2% expected. "The feeble business environment is prodding companies to restructure their workforce by laying-off workers, cut hours and change salary structures," resulting in the "lowest level in the history of" personal income, according to BBVA economist Nathaniel Karp ahead of the report. With the weak labour market in the United States squeezing incomes, the trend is "pushing consumers to decrease consumption," he warned. The PCE Core, the Fed's preferred measure of inflation, rose 0.2% in March to an annual rate of 1.8%. This is higher than the 0.1% rise expected by economists and identical to February's 0.2% rise and 1.8% annual rate. "In the months ahead, we expect the core PCE deflator to start easing as the growing economic slack dampens core price pressures," said Millan Mulraine from TD Securities ahead of the release. By CEP News Staff,
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