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The Commerce Department reported today that consumer spending for March was better than expected - given the high cost of gasoline - rising 0.6 percent in current dollar terms. Consumer spending for the first quarter overall, slowed to a 2.7 percent pace from a 4 percent pace in the fourth quarter of 2010. Nonetheless, economists had been expecting a steeper fall-off, with only a 2 percent increase previously projected.

The rise in spending corresponds to a slight increase in Americans' income. Personal income rose in March by 0.5 percent, above expectations of a 0.3 percent gain.

"Consumers continue to growth their spending despite rapidly rising gasoline prices and confidence that has suffered since gasoline prices started rising," said Scott Hoyt at Moody's Analytics. "That said, real spending growth was modest, lagging its fourth-quarter pace in both March and the first quarter as a whole."