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Saturday, May 31, 2003

Spending declines in April



The Associated Press

WASHINGTON - Consumers were reluctant to go shopping in April, trimming spending by the largest amount since the beginning of the year.

The Commerce Department reported Friday that spending declined by 0.1 percent from March, matching a drop registered in January. April's pullback comes after consumers splurged in March, boosting spending by 0.8 percent.

Americans' incomes, including wages, interest and government benefits, were flat in April - compared with a 0.4 percent increase in March - as the weak job market took a bite out of earnings.

Because income growth can help fuel future spending by consumers, continued stagnation of incomes would be troubling, economists said.

Wages and salaries dropped by 0.2 percent in April from the month before, compared with a 0.5 percent rise in March.

The spending and income figures are not adjusted for price changes.

In April, consumers cut spending on nondurable goods, such as food and clothes, by 1.4 percent, a reversal from March's 1 percent rise.

Spending on durable goods rose 1.2 percent in April, down from a 2.9 percent increase in March. Spending on services went up 0.3 percent in April, the second month in a row.



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