Spending Sluggish Amid High Energy Costs

WASHINGTON (AP) -- Consumer spending rose at the weakest pace in five months in March as a surge in gasoline prices left shoppers with little left over for other items.
The Commerce Department reported Monday that consumer spending on all items was up 0.3 percent last month, the slowest increase since a similar rise in October. That lackluster gain came even though personal incomes rose by a healthy 0.7 percent last month.
The spending performance in March was even weaker when the effects of higher gasoline prices were removed. After adjusting for price increases, consumer spending actually fell by 0.2 percent in March, the poorest showing since September 2005 when the economy was suffering the aftershocks of Hurricane Katrina.
"People spent more in March but may be enjoying it less as the rising price of energy is cutting into what they actually take home," said Joel Naroff, chief economist at Naroff Economic Advisors, a private consulting firm.
On Wall Street, the Dow Jones industrial average fell 58.03 points to close at 13,062.91. But even with the loss on the final trading day of the month, the Dow still posted a 5.7 percent gain for all of April, its best peformance since April 2003, as investors put aside worries about weak economic growth to focus instead on strong corporate earnings reports.