Stimulus checks boost U.S. consumer spending

Ready. Set. Shop.

That's exactly what American consumers did in the month of March - armed with $1400 stimulus checks and an extra $300 in jobless benefits.

Consumer spending, which accounts for more than two-thirds of all U.S. economic activity, jumped 4.2 percent last month...more than reversing a slump in February.

The spending rebound reported Friday sets the stage for a strong second quarter and beyond.

Consumer moods have brightened along with the growing vaccination rate. A measure of household sentiment hit a 13-month high in April.

Personal fortunes have also improved.

The government's reading on personal income surged 21 percent after dropping in February.

And that's not just due to government stimulus checks.

Wages are on the rise. A separate report on Friday showed the biggest jump in the broadest measure of labor costs in almost 14 years.

That's stoking fears of wage inflation as employers are getting forced to pay more to compete for workers.

The Fed's preferred measure of inflation showed its biggest year-over-year jump in over 12 months on Friday, but still remains below the Fed's key two-percent target.