- The Washington Times - Tuesday, April 29, 2003

   Americans flocked to shopping malls in March, boosting spending by 0.4 percent, the biggest gain in three months, as consumers started to shake off their worries about the Iraq war.
   The Commerce Department report released yesterday follows a February report that showed spending had risen by a lackluster 0.1 percent after falling by 0.1 percent in January. The wintertime reports reflected harsh weather and plunging consumer confidence because of growing anxiety about the war.
   Personal incomes also rose by 0.4 percent in March, double the February gain.
   Analysts took the increases as a positive sign that the economy, which has been struggling for months, could start seeing stronger growth now that the war is winding down.
   “Given all the worries in March, the fact that consumers still spent money provides hopes that going forward we will see even more visits to the malls,” said Joel Naroff, chief economist of Naroff Economic Advisers.
   But analysts also cautioned that any sustained rebound in incomes and spending will require an improvement in the nation’s job picture, something they said was still some months off.
   Many analysts are predicting the jobless rate, at 5.8 percent in March, will increase to 5.9 percent or perhaps 6 percent when the April report is released Friday.
   Lynn Reaser, chief economist at Bank of America Capital Management, said she was looking for the unemployment report to show another 30,000 jobs lost.
   “Jobless claims suggest that companies are still laying off workers at a significant pace in April while only a few companies were hiring,” she said.
   However, a drop of 30,000 jobs would be far below the 465,000 combined jobs lost in February and March.
   The overall economy grew at a sluggish rate of 1.6 percent in the first three months of the year, but the more optimistic analysts believe growth will strengthen to above 2 percent this quarter and 3 percent or more for the second half of the year.
   The Commerce Department report on incomes and spending showed the jump in spending in March included gains in all categories. Spending on big-ticket durable goods, such as automobiles, posted a sizable 1.5 percent gain after two straight months of declines.
   Still, the increase was much more subdued once the effect of rising prices on purchases of gasoline and other items was removed. Adjusting for inflation, the March increase was 0.1 percent, while February went from a gain of 0.1 percent to a decline of 0.4 percent.
   Americans’ disposable income, the amount left over after taxes are paid, rose by 0.3 percent in March, after a 0.2 percent increase in February. But with spending rising at a faster pace, the personal savings rate dipped slightly to 3.6 percent, down from 3.7 percent in February.

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