Even with the loss of the payroll tax holiday at the beginning of the year, U.S. consumer spending doesn't look like it's going to slow down any time soon.
"Personal income increased $30.9 billion, or 0.2 percent, and disposable personal income (DPI) increased $20.7 billion, or 0.2 percent, in March," the Commerce Department announced Monday.
"Personal consumption expenditures (PCE) increased $21.0 billion, or 0.2 percent. In February, personal income increased $151.2 billion, or 1.1 percent, DPI increased $134.0 billion, or 1.1 percent, and PCE increased $81.6 billion, or 0.7 percent, based on revised estimates," the report adds.
Income increased 0.2 percent last month, following a gain of 1.1 percent in February. After-tax income also rose 0.2 percent.
Real disposable income saw an increase of 0.3 percent in March, slightly less than the 0.7 increase seen in February. Meanwhile, real personal consumption expenditures for both March and February increased at a rate of 0.3 percent.
So RDI and RPC increased at the exact same rate?
Spending on services drove the March increase.
Higher spending on utilities does not signal consumer confidence the way purchases on household goods, such as new appliances or furniture, typically do. And other reports suggest consumers may be starting to feel the impact of the tax increase. Sales at retail stores and restaurants fell in March by the most in nine months.
Here's a chart break down of the today's report [via Zero Hedge]:
Durable goods spending is down:
Non-Durable spending is also down:
But services spending is up -- way up:
Why the increase in services spending?
The Associated Press says it might have something to do with the unseasonably cold March we just had (people paying to heat their homes). And it was a cold March. But it's just a theory. There's not enough information in today's report to confirm that.
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The Associated Press contributed to this report.