Snapshots of the economy: Consumer spending fell more than expected in March after two straight monthly gains, a stark reminder of a fragile economy that has pushed a record number of Americans to draw jobless benefits. The Commerce Department says consumer spending dropped 0.2% in March, worse than the 0.1% decline economists expected. Incomes, reflecting persistent mass layoffs, dropped 0.3%, also worse than expected. The personal savings rate rose to 4.2% from 4% in February. It stood at 4.4% in January, the first time in more than a decade the rate has been above 4% for three straight months. The Labor Department says new applications for unemployment aid fell to a seasonally adjusted 631,000 last week. That was down from the prior week’s 645,000, which was revised slightly higher from the government’s initial estimate. Economists had expected a small increase in new claims.
No longer charging: Visa says the total volume of purchases on its branded debit cards exceeded credit card purchases for the first time ever during the fourth quarter of 2008. According to the Wall Street Journal, debit cards have gained popularity as consumers cut down on credit card usage. MasterCard says its debit card processing volume rose by more than 13% in 2008, while credit card processing dropped by 2.2%.
