Real per capita consumption again advanced strongly as disposable income rose and personal saving fell slightly. Underlying all these rising indicators, non-farm employment continued to grow at the same fast pace that has prevailed since 1993. F.R. Flow of Funds National income advanced a strong 3.8 percent in the first quarter, primarily in compensation of employees. The increase in government saving was due entirely to an increase in the current surplus of the government. The commodity price index slumped below the 1990 base due primarily to weakness in metals prices, which by March were only 75.9 percent of the base level.
Excess capacity underlies the weakness even though demand is strong.
These three areas may presage a coming slowdown. Commercial bank loan growth also accelerated but consumer credit growth slowed. Credit market debt expanded at the high rate reached in the fourth quarter of 1997. The deficit on goods and services accelerated in the first quarter as the goods deficit increased while the services surplus was little changed. Investment flows both into and out of the U.S. slowed drastically in the first quarter.