WASHINGTON — Americans increased their spending more slowly in March, a sign that scant pay increases may be causing consumers to become more cautious. Their spending rose 0.3 percent last month.
Slow wage growth and softer consumer spending gains are the latest evidence that the economy might be weakening after a strong first two months.
Economists say a warm winter made the economy look better because it caused some activity that normally occurs in spring to occur in January and February. That made March’s gain smaller.
A more troubling factor in the long run is that Americans are receiving little or no pay raises. “Real” income has been growing too slowly to sustain healthy increases in consumer spending, many economists say.
After-tax income rose just 0.6 percent in the first three months of 2012 compared with a year earlier. That was the smallest gain in two years.