A shopper organizes his cash before paying for merchandise at a Best Buy Co. store in Peoria, Illinois, U.S., on Friday, Nov. 23, 2012. (Photo: Daniel Acker/Bloomberg/Getty)
The Commerce Department said on Tuesday consumer spending increased 1.0%, the largest gain in more than 6 years and more than the median forecast for 0.7%. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, was also revised down in March to show flat instead of the previously reported 0.1%.
Personal income increased 0.4% in March, matching the median forecast.
Still, last month’s increase was the largest gain since August 2009 and, when adjusted for inflation, increased 0.6%. That’s the biggest gain since February 2014, after being flat in March.
The personal consumption expenditures (PCE) price index, excluding the volatile food and energy components, rose 0.2% last month after edging up 0.1% increase in March. In the 12 months through April the core PCE rose 1.6% after a similar increase in March.
Meanwhile, even though the data could be construed as another reason to anticipate the Federal Reserve will hike rates later this year, the core PCE is the Fed’s preferred inflation measure. Currently, it is running below the U.S. central bank’s 2% target.
