
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, April 30, 1994                   TAG: 9405020148
SECTION: BUSINESS                    PAGE: A-6   EDITION: METRO 
SOURCE: ASSOCIATED PRESS
DATELINE: WASHINGTON                                LENGTH: Medium

INCOME, SPENDING, HOME SALES UP

Americans were earning more and spending more last month, but only moderately quicker. And the housing industry shook off winter doldrums and took off in March despite climbing interest rates.

``The latest set of data suggest that the economy is emerging from its winter hibernation, but at a much slower pace than that witnessed in the fourth quarter of last year,'' said economist Jose Rasco of Merrill Lynch & Co.

The Commerce Department reported Friday that personal income rose 0.6 percent in March and consumer spending nearly kept pace, rising 0.4 percent.

The department revised estimates upward for February as unusual factors sent incomes up 1.8 percent and spending 1.3 percent.

The February income jump was the biggest since it soared 5.1 percent in December 1992. The February rise in consumer spending, which represents two-thirds of the nation's economic activity, was the largest since September 1992 when it increased 1.7 percent.

Spending has risen in 11 of the past 12 months, only declining in January when it slipped 0.1 percent.

The government said sales of new homes jumped 11.1 percent in March, the biggest increase in six months as the housing industry rebounded from winter storms and frigid cold.

Sales totaled 739,000 at a seasonally adjusted annual rate, up from a revised 665,000 in February. The original February estimate was 649,000.

Fixed-rate, 30-year mortgages averaged 7.68 percent in March, compared with 7.15 percent a month earlier. Rates were at 8.32 percent on Thursday.

In another development, Treasury Secretary Lloyd Bentsen announced the United States intervened to support the value of the dollar in foreign currency markets as the greenback approached a record low against the Japanese yen. The move appeared to signal a shift in administration policy away from putting pressure on the yen as a way to cure America's huge trade deficits with that country.

Analysts said the latest government statistics buttress reports that the economy is expanding at a moderate rate, and that inflation - while increasing - is well in check. ``Wage and income growth actually were very strong in February. But that was due to factors not to be repeated month to month,'' said Marilyn Schaja of Donaldson, Lufkin & Jenrette Securities Corp. ``Income is on a moderate growth path.''

The Clinton administration said it is pleased with the home sales figures. Housing growth is ``on a solid path,'' said Henry Cisneros, secretary of Housing and Urban Development.

David Berson of the Federal National Mortgage Association said the housing market is fundamentally strong, with the growing economy and pent-up demand offsetting mortgage rate increases.

The Commerce Department said incomes rose to a seasonally adjusted annual rate of $5.63 trillion in March from $5.60 trillion in February. Spending was up to a seasonally adjusted annual rate of $4.58 trillion from $4.56 trillion in February.

by CNB