Good news for consumers. Rising wages pushed incomes higher to start the second quarter, while spending increased the most for any month so far this year. Paired with strong gains in January and February, incomes are showing the strongest start to a year since 2014. Adjusting for rising prices in April, "real" (inflation-adjusted) consumer spending was up a healthy 0.2%. And the best news from today's report is that private sector wages and salaries accounted for almost all of the increase in income, while government redistribution was unchanged after rising for four consecutive months. If President Trump wants faster growth, he needs to slow the growth of (or outright reduce!) government benefits. Before the Panic of 2008, government transfers – Medicare, Medicaid, Social Security, disability, welfare, food stamps, and unemployment insurance – were roughly 14% of income. In early 2010, they peaked at 18.5%. Now they're around 17%, but not falling any further. Redistribution hurts growth because it shifts resources away from productive ventures and, among those getting the transfers, weakens work incentives. Along with the rising incomes in April, spending ticked up as well. Spending on goods rose 0.7%, and spending on services increased 0.3%. As always, we like to take a step back and look at the trend. While spending growth has outpaced income over the past year, incomes are up at a 4.2% annual rate in the past three months compared to a 3.1% pace for spending. Meanwhile, the financial obligations ratio - which compares debt and other recurring payments to income – is near the lowest levels seen in thirty years.