(MENAFN- AFP) US consumers held tight to their wallets in March, spending barely more than they had in February despite enjoying higher incomes, according to Commerce Department data issued Friday.
Consumer spending, which typically accounts for two thirds of US economic activity, edged up just 0.1 percent from February but was flat when adjusted for price changes, the department said.
February's spending increase was revised up to a modest 0.2 percent gain.
Income growth however was stronger. Personal income in March picked up from a February dip, rising 0.4 percent, as wages and salaries rebounded.
Contributing to the economy's weakness at the turn of the year, consumer spending has slowed for three straight quarters, and fell to a 2.1 percent annual rate in the first three months of 2016.
The US economy nearly stalled in the first-quarter, expanding only 0.5 percent at an annual rate.
Though consumers had more spending power last month they chose to squirrel some of that away in savings.
Post-tax, or disposable personal income rose 0.4 percent, while the personal saving rate jumped to 5.4 percent from 5.1 percent the previous month.
Inflation decelerated in March under pressure from falling energy prices, and remained well below the Federal Reserve's 2.0 percent target.
Consumer prices rose at an annual rate of 0.8 percent, down from 1.0 percent in February. Core prices that strip out food and energy were up 1.6 percent.
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