U.S. consumer spending rose as expected in April, government data showed on Friday, as shoppers made a solid start to the second quarter after a hefty contribution in the first three months of the year. Personal spending was up 0.3 percent in April, the Commerce Department said, matching Wall Street forecasts. March's gain was revised to 0.5 percent from 0.4 percent initially reported. The government said on Thursday spending rose 3.9 percent in the first quarter as households underpinned America's strong economic recovery. But analysts expect consumption to moderate as Americans adjust to 21-year high oil prices and escalating debt payments as market interest rates advance.
The report also showed inflation slowing last month, with a price index for consumer spending gaining 0.1 percent after an unrevised 0.3 percent rise in March. The so-called core index, which strips out energy costs, also rose 0.1 percent, after climbing 0.2 percent the previous month. The moderation in prices moved the year-on-year core inflation reading -- a favorite of Federal Reserve Chairman Alan Greenspan -- to a 1.4 percent gain after March's downwardly revised 1.3 percent increase. This follows the jump in core inflation registered in the consumer price index, which posted a 0.3 percent monthly advance in April for a 1.8 percent year-on-year rise. That increase has put the markets on red alert for a Fed rate rise in June. Personal income rose 0.6 percent in April, slightly higher than forecasts of a 0.5 percent rise. Taking inflation and taxes into account left disposable income up 0.4 percent.///