Reflecting the distribution of another round of stimulus checks, the Commerce Department released a report on Friday showing U.S. personal income skyrocketed in the month of March.
The Commerce Department said personal income soared by 21.1 percent in March after plunging by a revised 7.0 percent in February.
Economists had expected personal income to spike by 20.3 percent compared to the 7.1 percent slump originally reported for the previous month.
Disposable personal income, or personal income less personal current taxes, also shot up by 23.6 percent in March after tumbling by 7.9 percent in February.
The report also showed personal spending jumped by 4.2 percent in March following a 1.0 percent decrease in February. Personal spending was expected to surge up by 4.1 percent.
Excluding price changes, personal spending advanced by 3.6 percent in March after slumping by 1.2 percent in the previous month.
With income spiking by much more than spending, personal saving as a percentage of disposable personal income soared to 27.6 percent in March from 13.9 percent in February.
“The strong consumer showing at the end of Q1 sets the tone for a summer boom,” said Gregory Daco, Chief U.S. Economist at Oxford Economics. “As health conditions improve and the economy reopens, generous fiscal stimulus, rebounding employment and rising optimism will help unleash pent-up demand.
He added, “We foresee real consumption growth above 9% this year – the strongest performance since 1946 – and excess savings should help smooth spending into 2022.”
Meanwhile, a reading on inflation said to be preferred by the Federal Reserve showed the annual rate of core consumer price growth accelerated to 1.8 percent in March from 1.4 percent in February.
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