The Bureau of Economic Analysis said that personal spending remained flat in March, slowing from more-robust purchasing at the end of 2016. Personal consumption expenditures were unchanged in both February and March, down from gains of 0.6 percent and 0.2 percent in December and January, respectively. These data suggest that Americans have once again become more cautious in their spending. To illustrate this point, personal spending grew 0.9 percent at the annual rate in the first quarter, decelerating sharply from the 5.6 percent annual pace seen in the fourth quarter. More than anything, that helps to explain the soft real GDP numbers for the first quarter of 2017, up just 0.7 percent. In addition, the savings rate has moved higher with weaker spending activity, up from 5.2 percent in December to 5.9 percent in March.
To be fair, we have seen improvements in personal spending over the longer term. For instance, personal consumption expenditures have risen 4.7 percent since March 2016. Moreover, the savings rate was also slightly higher one year ago at 6.2 percent. Read More