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WASHINGTON (MarketWatch) -- Higher prices took away all the income gains U.S. households received in March, the Commerce Department estimated Thursday.
Consumer prices rose 0.3% during the month, matching the 0.3% rise in incomes that was expected by economists surveyed by MarketWatch. See Economic Calendar.
Real disposable incomes were unchanged in March after accounting for taxes and inflation.
"The forces that had supported consumption have collapsed," wrote Joe Liro, an economist for Stone & McCarthy Research.
Consumer spending increased 0.4%, or just 0.1% after adjusting for rising prices. Economists expected a 0.3% rise in spending.
"With government rebate checks on their way, we will see a temporary lift to consumer spending in the coming few months," wrote Joshua Shapiro, chief economist for MFR Inc., adding that "it is likely that a significant portion of the rebates will be either saved or used to pare debt."