Consumer spending and income growth both fell in March, a sign that the recession could persist, the Associated Press reported.

The Commerce Department reported that consumer spending fell by 0.2 percent last month and incomes were down 0.3 percent. Both declines were steeper than economists expected.

The personal savings rate remained flat in March at 4.2 percent, a sign that households have been cutting back on spending and boosting savings as their investments have decreased and fears of job cuts persist.

Consumer spending in the first quarter rose at a 2.2 percent annual rate after two consecutive quarters of decline. However, many economists expect spending will decrease in the April-June period.

Meanwhile, the Institute for Supply Management-Chicago Inc. reported today that its index of U.S. business activity rose to 40.1 from 31.4 the prior month. Readings below 50 signal a contraction, Bloomberg reported. The index hit its highest level since September as commercial orders and production improved.