US Income gains eroded by inflation
WASHINGTON - Higher prices took away all the income gains U.S. households received in March, the Commerce Department estimated Thursday.
Consumer prices rose 0.3% during the month, matching the 0.3% rise in incomes that was expected by economists surveyed by MarketWatch.
Real disposable incomes were unchanged in March after accounting for taxes and inflation. Real disposable incomes are up 0.9% in the past year.
Consumer spending increased 0.4%, or just 0.1% after adjusting for rising prices. Economists expected a 0.3% rise in spending.
The report on personal incomes fleshes out monthly details contained in the quarterly report on gross domestic product released on Wednesday. That report showed consumer spending rose at the slowest pace in seven years during the first three months of the year.
The Federal Open Market Committee noted surging energy and commodity prices and higher inflation expectations in its policy statement released Wednesday, but the FOMC cut its target interest rate by a quarter percentage point to 2% anyway.
The government will report on the April employment market on Friday, with economists expecting payrolls to fall by 80,000 for a second straight month and for the jobless rate to rise to 5.2%.