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"What was encouraging [in the personal income report] was that the income numbers improved. Our expectation is that job growth does increase gradually"
- Peter Newland, an economist at Barclays Capital Inc.
U.S. consumer spending was boosted by higher than expected incomes, said the Bureau of Economic Analysis on Monday. Household purchases increased 0.3 per cent. Incomes gained 0.4 per cent, the most in three months.
"This report sets up fairly well for the second quarter," said Peter Newland, a U.S. economist at Barclays Capital Inc. in New York. "What was encouraging was that the income numbers improved. Our expectation is that job growth does increase gradually" this
quarter, he said.
"The trend is good from the perspective that incomes are outpacing spending, so we don't see consumers dipping into savings as much," said Kathy Lien, head of research at GFT Forex. "Of course, markets like increased spending, but in this situation it's a healthy trend in terms of reducing household debt levels," she said.