U.S. consumer spending recorded its largest increase in more than four and a half years in March, cementing views the economy ended a dismal first-quarter on solid footing.
The growth picture also was brightened by data on Thursday showing factory activity accelerated for a third straight month in April.
The Commerce Department said consumer spending increased 0.9 percent after rising by 0.5 percent in February. March’s gain was the biggest since August 2009 and beat economists’ expectations for a 0.6 percent rise.
Consumer spending accounts for more than two-thirds of U.S. economic activity.
In a separate report, the Institute for Supply Management said its index of national factory activity rose to 54.9 last month, up from 53.7 in March. It was the best reading since December and reflected a pick-up in manufacturing jobs. New orders, however, were unchanged.
The upbeat reports added to data such as employment and industrial production in suggesting there was momentum in the economy at the tail end of a difficult first quarter, providing a springboard for faster growth in the April-June period.