Official figures show that US consumer spending dropped 0.2% in March after two monthly increases, as American income levels fell.
The Commerce Department said personal consumption expenditures, a main driver of economic activity, reversed course last month after surprising gains in January and February.
The March figure was weaker than the 0.1% drop expected by economists.
The renewed caution by consumers came as overall personal incomes fell 0.3%, a figure worse than expectations for a 0.2% drop.
The news was less than encouraging for an economy that according to the most recent estimate contracted at a 6.1% annual pace in the first quarter.
Obama advisor sees 'glimmers of hope'
One of US President Barack Obama's top advisors today said she saw glimmers of hope that the economy was stabilising, but it was still 'hard to know' if a recovery would get under way this year as expected.
'We expect the economy to level out in the second half of the year and then begin to recover,' Christina Romer, chairwoman of the White House Council of Economic Advisers, said in prepared remarks. The remarks were in testimony prepared for delivery to the Joint Economic Committee of the US Congress.
