Consumers doing their part for economy

By Jeannine Aversa
Associated Press

WASHINGTON — Consumers — whose behavior plays a crucial role in shaping economic activity — increased their spending in April by a solid 0.3 percent, a good signal that the recovery remained firmly rooted as it entered the current quarter.

The increase reported by the Commerce Department yesterday came after a brisk 0.5 percent advance in March and suggested that consumers continued to do their part to support the economy.

Americans' incomes rose by a strong 0.6 percent in April, marking the largest gain since January 2001. The growth in income last month, which followed a 0.4 percent rise in March, was especially encouraging because that is the fuel for spending in the future. The income and spending figures are not adjusted for price changes.

Economists said an improved job climate is lifting wages and aiding income growth. "We are making our money the old-fashioned way — we are earning it," said Joel Naroff, president of Naroff Economic Advisors. "People have money to spend and they are doing just that."

Consumer spending accounts for roughly two-thirds of all economic activity in the United States.

The latest snapshot of consumer activity was slightly better than economists had expected. They were forecasting spending to go up by 0.2 percent and incomes to grow by 0.5 percent in April.