U.S. consumer spending, personal income up in April

U.S. consumer spending and personal income both increased in April, but the savings rate dropped, a sign of continuing economic recovery, the Commerce Department reported Friday.

Consumer spending gained 41.5 billion U.S. dollars, or 0.4 percent in April, after a revised 0.5 percent increase in March.

Personal income increased 46.1 billion dollars, or 0.4 percent last month, the same level as the previous month. Disposable personal income increased 35.1 billion dollars, or 0.3 percent, the department said.

Last month, the U.S. savings rate, personal saving as a percentage of disposable personal income, remained unchanged at 4.9 percent. The rate remains well above the 2.1 percent average savings rate for all of 2007.

In the first quarter of this year, the savings rate was recorded at 5.1 percent, the lowest level in more than two years. In the second quarter of 2010, the U.S. savings rate reached 6.2 percent, the highest quarterly level in recent years.

Consumer spending accounts for 70 percent of total U.S. economic activity. Experts expect a rebound in consumption will strengthen the economic recovery in 2011.

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