Consumer spending has been rising faster than incomes, according to the most recent U.S. Department of Commerce data, but despite a high confidence level, savings is at its highest level in years.
Total personal disposable income rose by 4 percent in March compared to the same month in the prior year, to an adjusted $14.7 trillion.
Personal consumption expenditures jumped by 4.5%, the biggest monthly increase in more than two years, due primarily to a sharp rise in consumption of services, though spending on durable goods also increased significantly.
Spending has outpaced income in each of the last five months, as the improving employment situation and financial markets helped restore consumer confidence.
The personal savings rate, which hit a two-year high of 6.2% in March 2016 and then drifted lower for most of the rest of last year, has risen in each month of 2017 so far, and now stands at 5.9%.