Consumer spending rises in April

Washington, D.C. A report released Friday by the Commerce Department said that retail sales inched up 0.4% in April, better than the 0.2% increase economists had expected.

The gain was less than the 2.1% growth in March, but that surge was boosted by an early Easter holiday and auto incentives.

Consumer spending rose in the first three months of this year at the fastest pace in three years, prompting hope from economists that better news on employment will continue to boost spending in coming months.

A report Friday from the Federal Reserve showed that industrial production rose 0.8% in April, better than the 0.6% gain economists had expected. The increase provided further evidence that manufacturing is playing a leading role in supporting the economic recovery.

By retail category, hardware stores experienced a 6.9% increase in spending, and spending was also up at health and beauty shops and gas stations.

Auto sales edged up 0.5%.

Sales at department stores fell 1.5%, and general merchandise stores declined 0.4%. Sales at appliance and electronics stores were down 0.4% in April following an even bigger 1.3% drop in March.

The overall economy, as measured by the gross domestic product, grew at annual rate of 3.2% with that gain led by the biggest advance in consumer spending in three years.

Economists worry spending could falter in the coming months without more growth in income but there have been encouraging signs that job growth is picking up. In April, payroll jobs grew by 290,000, the most in four years. Yet the unemployment rate rose to 9.9% as more people began or resumed job searches -- a sign that many are feeling more optimistic about the labor market.