U.S. consumer spending growth slowed in March after a strong February, even as personal income growth picked up pace, government data showed Monday.
Consumer spending, which accounts for an estimated 70% of U.S. economic activity, rose 0.4% in March, helped by a healthier job market this year, the Commerce Department reported.
"Real consumer spending lost a little momentum toward the end of the first quarter, but wages rose at a solid 4.4% annualized pace between December and March and we expect that consumer spending will continue to be supported by improved hiring and wage growth," RDQ Economics analysts said in a research note.
In February, spending jumped a revised 0.9%, the strongest gain since August 2009.
While overall growth slowed, consumer spending actually accelerated, increasing at an annual rate of 2.9% in the first quarter, the fastest pace in more than a year and up from 2.1% spending growth in the fourth quarter.
The slowdown in overall growth primarily reflected less business investment, a dip that analysts attributed to temporary factors. Many analysts reported that while the first quarter growth was a soft patch, they are not looking for the economy to falter like it did in the first half of 2011. During that period, the economy was hit by surging gasoline prices, natural disasters in Japan which disrupted supply chains to U.S. factories and financial jitters stemming from the European debt crisis.