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Last Updated: Monday, 1 May 2006, 14:00 GMT 15:00 UK
US consumer spending increasing
US shoppers
Consumer spending has been keeping the US economy moving
US consumer spending rose more than expected in March, the latest indication that American economic growth is continuing to gather pace.

Consumer spending rose by 0.6% in March, the US Commerce Department reported, up from the 0.2% growth seen in February.

The rise in spending was aided by an increase in incomes, up 0.8% in March, compared to the 0.3% jump in February.

The core price inflation index, which excludes energy and fuel, was up 0.3%.

Closely watched by the US Federal Reserve, the rise in the core price index was an increase on February's 0.1% advance.

'Reasonably good'

Last week preliminary figures showed that the US economy was growing at a torrid 4.8% annual rate.

The strong consumer spending increase will add to pressures on the Federal Reserve to increase interest rates by another quarter of a percentage point at its next meeting on 10 May to 5%.

This would be the 16th rise since June 2004, as the Fed aims to calm any inflationary pressures that accompany the US's ongoing economic growth.

However, Fed boss Bernard Bernanke told Congress last week that he planned to pause before making further rate increases, in the belief that the US economy would slow later in the year.

Economist Robert Brusca said the latest consumer spending figures looked "reasonably good".

"We are [now] looking at what will happen in the second and third quarter and beyond with oil getting heavy again," he said.

"At least, we had pretty good spending in March."

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