Seen as an important bell weathers of the economy consumer spending and personal incomes are monitored to gauge the impacts of economic activity on individual Americans. In March, the Commerce Department reports that Americans incomes did rise, along with spending. Much of the spending increase, however, went to cover costs for higher fuel prices.
Personal incomes rose 0.5 percent of the month, with spending rising 0.2 percent after adjusting for inflation. The increase in fuel prices is scaling back economists estimates for growth in the overall economy.
Consumer spending attributes for roughly 70 percent of economic activity and has largely contributed to the overall slow down in the economy for the first quarter of 2011. The rate of growth of spending slowed from 4 percent in the last quarter of 2010 to 2.7 percent in the first quarter of 2011. This contributed to the overall drop in economic growth from a rate of 1.8 percent to 3.1 percent.
