Washington, DC, United States (4E) – Spending by U.S. consumers climbed in March at its fastest rate in almost five years, the latest sign that world’s largest economy gained momentum with the arrival of spring.
Personal consumption, which includes everything from electricity to food spending, increased a seasonally adjusted 0.9 percent in March from the prior month, according to the Commerce Department report released Thursday. The gain is the largest since August 2009. Economists polled by The Wall Street Journal had projected an increase of 0.6 percent in consumer spending.
Purchases of physical goods climbed 1.4 percent in March, which includes a 2.6 percent gain in durable goods spending. Spending on services inched up 0.7 percent.
February’s total consumer spending was upwardly revised to a 0.5 percent gain from a previous reading of 0.3 percent, providing a stronger foundation going into March.
Consumer spending accounts for more than two-thirds of the entire output of the U.S. economy. It eased during the severe winter weather, expanding by just 0.1 percent in December and 0.2 percent in January after a stronger 0.6 percent expansion in November. But the growth still boosted the country’s gross domestic product in the first quarter, helping offset sharp declines in business investment and exports.