By John S. McClenahen It will be another four weeks before the U.S. Commerce Department publishes personal spending data for March. But with relatively high gas prices and a very soft job market there's little basis to believe that consumers have gone ...
ByJohn S. McClenahen It will be another four weeks before the U.S. Commerce Department publishes personal spending data for March. But with relatively high gas prices and a very soft job market there's little basis to believe that consumers have gone on a spending spree this month. Each penny increase in gasoline prices, for example, drains more than $1 billion from discretionary income, notes Merrill Lynch & Co., New York. Last month, consumer spending, not adjusted for inflation, was flat for the second consecutive month, says the Commerce Department. However, figuring in energy-driven price changes, spending dropped 0.4% in February. Real spending fell 0.2% in January. "With March spending likely to be soft, consumer spending will rise at slightly over a 1% rate in the first quarter," predicts David A. Rosenberg, Merrill's chief North American economist. "This is consistent with our forecast of about 1% [annual rate] GDP growth in the first quarter."
