Source: Economics Group of Wells Fargo Bank, N.A.
Summary
A March spending pick-up was about more than getting ahead of tariffs, although a surge in auto sales was the biggest driver. The next five largest increases were all services categories. Ultimately, income will determine the capacity for spending and that’s holding up, for now.
Car Salesman of the Year: Tariffs
In the immediate wake of this morning’s Q1 GDP report, the personal income and spending report for March offers greater details on how consumer spending surged in the final month of the first quarter. Real personal spending shot up 0.7% in March even as February’s comparatively modest spend was revised higher. In what may be that last month without meaningful tariff impact, inflation was a non-factor in March with both headline and core inflation flat over the month.