WASHINGTON — Personal income rose 0.8% in March for the third straight month, the government said today, while consumer spending dropped 0.4% to its lowest level in five months.
The difference means that Americans' saving rate--savings as a percentage of disposable income--was up one-half of a percentage point to 5.8%.
The Commerce Department said incomes totaled a seasonally adjusted annual rate of $4.67 trillion on top of 0.8% jumps in both January and February. The increases were originally reported to have been 0.7% in January and 0.9% in February.
Consumer spending totaled a seasonally adjusted annual rate of $3.66 trillion after a 0.6% gain in February. It was the lowest since an 0.3% advance last October.
Consumer spending is watched closely as a barometer of economic health since it accounts for about two-thirds of the nation's economic activity.
"The March and February increases in personal income were boosted by increases in subsidy payments to farm proprietors," the department said. "Excluding these payments, personal income increased $24.6 billion, or 0.5%, in March and $28.9 billion, or 0.6%, in February."
The report said Americans' income after taxes rose 0.8% in March, the largest increase since an 0.9% gain last December.
The key component of the income category, wages and salaries, rose $14.1 billion at an annual rate after a $22-billion gain in February.