Consumers Earned, Spent a Bit More in April

Spending by American consumers rose 0.4% in April, just a tad below a 0.5% increase in personal income, helping to push the nation’s saving rate to a record low of minus 0.7%, the Commerce Department said. The data were broadly in line with expectations and implied the economic expansion was still on track. Separately, the Conference Board said salaries will increase an average 4% in 1999 and 2000, not enough to drive the inflation rate higher. The research firm said in its annual compensation survey that it expects inflation to rise 2% this year, which means workers will probably see a real earnings gain of 2%. In 2000, inflation will probably increase 2.5%, resulting in a 1.5% real earnings gain, the group said.