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In the last month, U.S. household income rose the most, and the strong growth in spending led to a fiscal boost, laying the groundwork for strong economic growth in the second quarter.
Personal income rose 21.1% in March compared to the previous month, the Commerce Department reported on Friday, a record figure for 1946. The figure was marked by a sharp reversal of the 7 percent decline in February and exceeded expectations for economists for 20.3 percent. percentage increase.
Revenue growth was accompanied by a rebound in spending, which saw a 4.2% rise in consumption last month – the biggest gain since June. The savings rate also rose to 27.6 percent from the previous 13.9 percent.
“This puts consumption – and likely GDP – on track to achieve double-digit growth in the second quarter,” said Aneries Markowska, chief economist at Jefferies. “Although we are largely behind on stimulus payments, the savings rate rose to 27.6 per cent in March, which will continue to support spending in the coming months.”
USA Gross domestic product it rose by 6.4 per cent in the first quarter in the first quarter of the year, according to data released on Thursday, with personal consumption expenditure in particular and expenditure on goods in particular rising by 10.7%.
Americans have been able to break the chains of the bag thanks in part to two stimulus packages: a $ 900 billion deal approved in December and another $ 1.9 million package last month.
The rapid deployment of Covid-19 vaccines and fewer reductions in business activity and travel as coronary hospitalization decreases has further boosted spending.
“The strong consumer that appears at the end of Q1 sets the tone for the summer boom,” said Gregory Daco, an economist at Oxford Economics, who predicted real consumption of more than 9% this year, the strongest performance since 1946.
“Household income was $ 5 million more than the pandemic every year,” said ING economist James Knightley. “It’s an amazing figure that helps explain why the U.S. economy has been so good to Europe.”
Friday’s report also showed that the price index for personal consumption spending rose 2.3 percent year-on-year in March. The so-called main PCE index, the inflation reserve preferred by the Federal Reserve, rose 1.8 percent at the same time.
The Fed has said it is in no hurry to dismantle its ultra-adaptive monetary policy, although some investors and economists are concerned about a more sustained acceleration in inflation.
The central bank has said so before expects inflation to make them transient and highlight the so-called basic effects, which reflects the fact that last year prices fell this time as the coronavirus pandemic escalated.
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