U.S. consumers reduced spending and increased savings rates in April due to rising unemployment and uncertainty about the length of the recession, the government said Monday. With income growth far outpacing spending, Americans' personal savings rate jumped to 5.7 percent, the highest since early 1995, the Commerce Department reported. The level of savings—$620.2 billion—was the most on records dating from 1959. Incomes—the fuel for future spending—jumped by 0.5 percent in April, following two consecutive months of declines. April's improvement was due to tax cuts and benefit payments from the Obama administration's stimulus package, the department said. Wages and salaries were flat during the month. Consumer spending—which accounts for two-thirds of overall economic activity—fell 0.1 percent in April, slightly less than the 0.2 percent drop expected by economists. It was the second consecutive month that consumers reduced spending. Spending on durable goods—costly manufactured items expected to last at least three years—fell by 0.6 percent. Spending on non-durable goods like clothing and food also fell by 0.6 percent. Spending on services increased 0.3 percent.
