More Positive Economic News

Construction, Consumer Spending Up in March

Manufacturing cranked up, builders boosted construction spending to an all-time high and consumers opened their wallets wider - fresh signs the economy has snapped out of its end-of-year funk.

That was the message coming from the latest batch of economic reports released Monday.

A report from the Institute for Supply Management showed that factory activity expanded with gusto in April. The group's manufacturing index rose to 57.3 in April, from 55.2 in March. The showing was much better than the reading of 55 that economists were expecting.

In a second report, the Commerce Department said total construction spending in March climbed to $1.199 trillion, on an annualized basis, surpassing the previous record high set in February. That marked a big 0.9 percent jump from February's level - a performance that exceeded analysts' projections of a 0.3 percent gain.

Private builders ramped up spending on a wide variety of projects in March, including residential construction and factories. The government also spent more on big public works projects, including power plants.

In another report from the department, consumer spending rose 0.6 percent in March, an improvement from the 0.2 percent increase registered in February. Consumer spending plays a key role in shaping overall economic activity.

Incomes, the fuel for future spending, advanced by 0.8 percent in March. That was up from a 0.3 percent increase in February and marked the largest gain since September.

Income includes government payments as well as wages. Payments from the new Medicare prescription drug plan had the effect of helping to boost overall income in March. Wages, meanwhile, grew by a moderate 0.4 percent for the second month in a row.

Both the spending and incomes figures were better than economists were expecting. Before the release of the report, they were forecasting spending and income to each rise by 0.4 percent.

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