Consumer spending outpaced income growth in March, pushing down the savings rates to 2.7 percent the lowest level since 2008. The savings rate sank to 1.7 percent in 2007 as Americans purchased homes in the booming market.
Consumer spending rose 0.6 percent in March, meeting expectations while personal incomes rose 0.3 percent, the most in five months but not enough to allay concerns about the economy's need for more robust job growth, according to figures released Monday by the Commerce Department.
Consumers relied more on their savings, spending more with smaller income growth, leading to the lowest savings level since September 2008.
Job growth is the economy's looming issue with economists and Obama administration officials saying the unemployment rate will probably remain high for the foreseeable future. The next jobs report is due Friday and no change is expected to the 9.7 percent jobless rate.
In another economic indicator, inflation tied to consumer spending was up 0.1 percent in March and the same 0.1 percent increase, excluding food and energy. Inflation is up only 1.3 percent, excluding food and energy, in the past 12 months.