THE ECONOMY : Consumer Spending in April Up a Robust 1.1%

Consumer spending in April posted its best performance in nearly a year, rising 1.1%, the government said Friday in a report that analysts said shows the economy remains healthy even as growth slows.

While consumer spending rose at its fastest pace since a 1.3% increase last June, much of the growth was attributed to a sharp increase in auto sales because of rebates, low-interest loans and other industry incentives to move cars off dealers’ lots.

The Commerce Department also reported that personal income rose a weak 0.4% last month, compared to hikes of 0.8% in March and 1% in February. The April figure was the smallest increase since last November’s 0.2%.

But analysts blamed the sluggish income growth in April on lower farm subsidies over the past two months and on a fallback from higher auto industry bonuses and retroactive Social Security payments in March.

Discounting the auto sales and one-time weakness in incomes, “what you come out with is reasonably decent income and consumption growth which tends to make the Fed’s soft-landing scenario look more realistic,” said analyst Cynthia Latta of Data Resources in Lexington, Mass.

Federal Reserve credit-tightening designed to stem inflation has caused some economists to worry that resulting higher interest rates could move the economy into a recession, rather than the targeted soft landing.

But recent reports continue to point to an economic slowdown without recession.

And Friday’s income and spending report tells the Fed “that so far, so good; that there’s no reason to change what they’re doing because it doesn’t yet look like they’re guilty of overkill,” Latta said.