Economic outlook remains cautious

Economic outlook remains cautious

WASHINGTON

Factories are churning out more goods. Consumers are spending. Government aid is fueling construction activity. But stagnant pay and weak hiring will likely restrain the economic rebound in coming months.

That cautionary picture emerged from a series of economic reports Monday.

Consumers stepped up their spending in March by the largest amount in five months. Yet the increase was financed out of savings. Incomes rose only slightly.

Unless employers boost pay and ramp up hiring, economists say consumer spending will likely taper off and dampen the recovery.

Oil prices rise

Oil and retail gasoline prices edged higher Monday, as traders watched whether the massive crude spill in the Gulf of Mexico will curtail imports if the oil slick shuts down a key shipping lane.

Analysts said Monday oil prices are not being driven by the spill for now.

Instead they credit economic news — improving manufacturing, construction and consumer spending figures — along with a stronger stock market for driving prices higher.

“It just lends more credence that the economy is on the rebound,” oil analyst and trader Stephen Schork said.

To this point, supplies have not been interrupted.

Associated Press