US consumer spending slows in April

Consumer spending rose 0.4 percent in April, slowing a notch from March's 0.5 percent gain, while personal income also rose 0.4 percent, the department said.

The slowdown in April spending suggested the American consumer, whose buying drives a major share of growth in the economy, continues to be cautious in the face of rising food and fuel prices and high unemployment that rose to 9.0 percent in April.

Disposable income increased 0.3 percent, but adjusted for inflation, real disposable income edged down less than 0.1 percent in April.

The department's consumer price index showed food and fuel prices were still driving up the prices consumers pay, but those costs appeared to be showing up in other areas, too.

The consumer price index rose 0.3 percent in April, a bit softer than the 0.4 percent rise in March. Excluding food and energy, the index rose 0.2 percent, double the previous month's increase.

On a 12-month basis, inflation heated up to 2.2 percent, from 1.8 percent in March, according to the index which serves as a reference for the Federal Reserve.

The April inflation reading topped the Fed's 2.0 percent rate seen as the top end of its comfort zone for price stability.

Copyright AFP (Agence France-Presse), 2011