Personal Income Up 0.8%, Spending 0.7%

Americans’ personal incomes, propelled by profit-sharing payments in the auto industry, shot up 0.8% in March, the biggest increase in three months, while consumer spending posted a healthy advance as well, the government said today.

The Commerce Department said consumer spending rose 0.7%, after an even stronger 0.8% rise in February.

The spending and incomes report provided further evidence that the key consumer sector is continuing to power economic growth despite the fears that were raised after the October stock market collapse.

Today’s report said the 0.8% increase in incomes in March, which followed a revised 0.6% February gain, was the biggest monthly improvement since a similar 0.8% rise in December.

However, much of the strength came from profit-sharing payments made to auto workers during the month, which supplied more than half the $12.3-billion growth in the key wages category.

Without the profit-sharing bonuses and shifts in farm subsidy payments, incomes would have risen 0.2% during March.

Disposable, or after-tax incomes were up as well, climbing 0.6% in March after a 0.8% February increase.

Americans’ savings rate, savings as a percentage of disposable income, dipped slightly last month to 4.5%, contrasted with 4.7% in February.