U.S. personal income came out in line with consensus expectations this morning, but personal spending levels were lower than expected.

Personal income rose 0.3% in April over the previous month, but spending came in somewhat weaker than expected up 0.5%. Also, the previous month’s spending was revised down 0.3%.

“With tax breaks now well in the past, ongoing corporate layoffs, and consumer debt remaining at elevated levels, spending activity will continue to lose momentum,” says BMO Nesbitt Burns.

RBC Financial observes that “incomes have been on a downward growth path since February’s 0.6% gains and were down slightly in April after adjusting for inflation. Wage and salary income grew by a paltry 0.1%, suggesting ongoing wage constraints in the U.S. economy.”

“On balance, this report is consistent with fairly weak labour market conditions in the early stages of the U.S. economic upturn and will have little effect on markets, concludes RBC.

BMO Nesbitt declares, “U.S. consumers will not be a source of strong momentum in coming months. As a result, GDP seems set for a slower pace of growth in the second quarter.”