Notes
Personal income rose 0.5 percent in March after rising a revised 0.5 percent in February. This was in line with expectations. At the same time, personal consumption expenditures rose 0.3 percent after a downward revised gain of 0.2 percent in February. The personal savings rate stood at -0.8 percent, its ninth down month. On the whole, these figures are in line with expectations and should be neutral for financial markets.

Wages and salaries, the major portion of income, rose 0.5 percent in March after a 0.6 percent gain in February. Farm income jumped 17.7 percent in March after soaring 22.2 percent in February. This components has posted dramatic changes over the past six months as subsidy payments come on and off in this sector. On the whole, income growth continues to be favorable note after much smaller gains at the end of 2000.

At the same time, personal consumption expenditures rose 0.3 percent, after rising just 0.2 percent February. Durable spending fell 1.1 percent and spending on nondurable goods dropped remained unchanged in March. After adjusting for inflation, the nondurable goods spending figure crept up 0.2 percent. The personal consumption deflator remained unchanged in March after a 0.3 percent gain in February.

March personal savings were down 0.8 percent. The personal savings rate stood at -1.0 percent in February. While the overall level of personal savings may be misleading given the way these figures are calculated, there is no question that personal savings have decreased dramatically in the past few years. With the sharp fall off in the value of stock prices, this lack of savings could become more relevant to the pattern of consumer spending. If the jobless rate continues to tick higher, consumers may want to add to savings - and this would reduce retail sales down the road.