The economic surprise in recent years is the resilience of the American consumer: high borrowing costs and lingering inflation are not crimping overall spending.

Why it matters: The drivers of such robust spending — and how long they can last — are key to what's ahead for the economy.

By the numbers: For the second straight month, personal consumption expenditures (PCE) rose 0.8% in March, the strongest in more than a year.

• Even adjusted for sticky inflation, spending still rose notably, with an increase of 0.5%.

Meanwhile: The spending increase outpaced that of disposable personal income, which rose 0.5% — or 0.2%, in real terms.

• That brought the personal saving rate down to 3.2%, the lowest since 2022.
• Lower saving rates are a pandemic shift that stuck. Consumers used to save at a far higher rate — excluding the past few years, the saving rate was only lower in 2008.

What they're saying: "Yes the consumer is spending … but they continue to run down their savings in order to do so," Peter Boockvar, chief investment officer at Bleakley Advisory Group, wrote this morning.

• "Consumers may be starting to feel that strong gains in the stock market are locked-in and doing the savings for them," William Blair's macro analyst Richard de Chazal wrote in a note.

The intrigue: Another factor may be the immigration boom that's helped boost the supply of workers. In other words, higher spending is just a result of more shoppers.

• If that's the case, it would cool concerns that strong spending is a sign that the economy is reheating and poses an even greater inflation risk.

What they're saying: "In large part, sustained strong growth in consumption seems to be the result of a higher number of people who are working and producing, earning and spending," Evercore ISI vice chair Krishna Guha wrote in a note.

• He added that the "unusually rapid population growth associated with elevated cross-border migration, not all of which has yet been incorporated in standard economic statistics."
• Adjusting for higher population shows that, on a per capita basis, personal consumption expenditures "[are] less strong than [they] may appear from looking at the aggregate data."

The bottom line: According to Guha, the "unusually rapid population growth associated with elevated cross-border migration" has not yet been incorporated into economic statistics.