Income Rises 0.8%, Spending Slim 0.2%

Americans’ personal income increased a strong 0.8% in March while consumer spending edged up 0.2%, a combination that boosted the personal savings rate to the highest level in nearly four years, the government reported today.

As income advances continue to outpace spending increases, the personal savings rate has been inching upward and in March reached 6.3%, the Commerce Department said.

That was the highest level since the rate--savings as a percentage of after-tax income--hit 6.4% in May, 1985.

The March increase in income was caused partly by such special factors as profit-sharing payments to auto workers, a big increase in retroactive Social Security benefits and higher farm subsidy payments.

Excluding those special factors, income rose 0.6% last month.

The sluggish consumer spending was consistent with a series of recent government reports suggesting that economic growth is slowing down.

The 0.2% advance in personal consumption expenditures in March was the weakest performance since spending held steady last September.

The weakness was concentrated in spending on durable goods--big-ticket items expected to last at least three years. Spending on durables declined 1.5% last month, in part reflecting weak car sales.

Purchases of non-durable goods, meanwhile, rose 0.4%, and spending on services advanced 0.5%.