US consumer spending edges up in March

Consumer spending, the driver of the US economy, edged up for a second straight month in March while personal income stagnated, the Commerce Department reported Thursday.

Consumer spending rose 0.4 percent after a revised 0.2 percent gain in February. The February increase was previously estimated at 0.1 percent.

Spending by consumers accounts for more than two-thirds of the US economy; the March increase slightly missed expectations.

Personal income rose less than one percent after gaining 0.4 percent in February and 0.3 percent in January. The March increase was the smallest in 15 months.

Disposable personal income was up marginally in March, the weakest growth since December 2013 when it fell 0.1 percent.

The personal saving rate dropped from 5.7 percent in February, a two-year high, to 5.3 percent in March.

Inflation remained muted, well below the Federal Reserve's 2.0 percent longer-term target for price stability.

The Fed's preferred inflation measure, the personal consumption expenditures price index, rose 0.3 percent in March from a year ago. Stripping out volatile food and energy, the core PCE price index was up 1.3 percent.

Month-over-month, PCE prices rose 0.2 percent and core PCE prices were up 0.1 percent, the same increases as in February.