Consumers are receiving their refund checks, but remain hesitant to spend them, the Commerce Department reported Friday.
Despite disbursement of billions of dollars in stimulus payments, consumer spending and income remained slow.
How bad is the economy really? Watch Dan Gainor, of the Business and Media Institute, on how negative the media has been on the topic.
"With credit tightening, cash flow being squeezed and confidence near record lows, this will surely continue," Ian Shepherdson, chief U.S. economist at High Frequency Economics said.
Spending increased a slight 0.2 percent in April. But after adding in current inflation, the change is almost unnoticeable.
Incomes were just as weak, going up only 0.2 percent mainly because of the first round of refund checks, analysts said.
The Bush administration remained hopeful that the government's $106.7 billion in stimulus payments will give the economy the boost it needs. Checks began going out in April and are still being sent.
Consumer spending accounts for about two-thirds of all economic activity.
Not a Recession Yet
Still, the economy grew slightly faster in the first three months of this year than the government estimated.
While many Americans are struggling with the higher prices of food and fuel, the country still hasn't fallen into a recession.
A recession is commonly defined as the economy shrinking for two straight quarters.
But a new report called "The Great Media Depression" says that media coverage of the economy has been extremely negative.
Source: CBN News, The Associated Press