U.S. personal incomes soared in March by the most in a month since record-keeping began a monthly basis in 1946.
A third round of pandemic-relief checks powered the surge and also sparked a sharp rise in spending.
The 21.1 percent jump in incomes followed a 7 percent decline in February, Commerce Department figures showed last week. Purchases of goods and services, meanwhile, increased 4.2 percent last month, the most since June.
The March data showed that stimulus checks and unemployment aid almost doubled from a month earlier to nearly $8.2 trillion. Wages, meanwhile, rose modestly in March.
Inflation-adjusted personal spending increased 3.6 percent in March after a 1.2 percent drop a month earlier.
The personal savings rate jumped to 27.6 percent from 13.9 percent in February.
Speaking after the latest Federal Open Market Committee meeting on Wednesday, Fed Chair Jerome Powell noted that 12-month measures of inflation are likely to move “well above” 2 percent over the next few months, but the effects will “disappear” after May.
Inflation is a more significant concern to Warren Buffett, who is seeing it among Berkshire Hathaway’s collection of businesses.
“We are seeing very substantial inflation,” the Berkshire chairman and CEO said. “It is very interesting. We are raising prices. People are raising prices to us, and it’s being accepted.
“The costs are just up, up, up,” he added. “Steel costs, you know, just every day they are going up.”