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Lower Prices Offset Tax Hike as Spending Continues

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Americans spent more in March and their income grew, the latest indication that consumers are shrugging off a tax increase.

The Commerce Department says consumer spending increased 0.2 percent in March. That followed a 0.7 percent jump the previous month and a 0.3 percent gain in January.

Income increased 0.2 percent last month, following a gain of 1.1 percent in February. After-tax income also rose 0.2 percent.

Higher incomes helped offset an increase in Social Security taxes that kicked in Jan. 1. On Friday, the government said consumer spending rose in the January-March quarter at the fastest pace in more than two years.

Spending on services drove the increase. One reason services were higher: Americans paid more to heat their homes during a unseasonably cold March.

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