Americans, finally receiving their tax refund checks in significant numbers, saw their disposable personal income soar a record 2.9% last month, the Commerce Department reported today.
With more money in their pockets, Americans also spent more last month, boosting personal consumption spending by 0.7%, the department said.
The gain in disposable income, the amount left over after paying taxes, compared to a 0.4% decline in March. That drop was caused by computer foul-ups at the Internal Revenue Service that delayed the processing of refund checks this year.
The delay proved to be a drag on economic growth, sending consumer spending down by 0.2% in March and adding to the overall sluggish economic activity in the first quarter this year.