WASHINGTON (4/1/13)--U.S. consumer spending in February increased by the most in five months, while savings and personal incomes also rose, adding to signs of heightened economic activity in the first quarter, according to a Commerce Department report released Friday.
Consumer spending--which gauges purchases that span from autos and clothing, to health care and travel, and which constitutes 70% of the U.S. economy--rose 0.7%, after a 0.4% gain in January (The Wall Street Journal, The New York Times and Bloomberg.com March 29).
Personal incomes increased 1.1% in February. That boosted the savings rate up from a five-year low, Bloomberg said.
Progress in the labor market and a gain in household wealth--linked to increasing home values and stocks--helped buffer the impact of more expensive fuel and higher payroll taxes, Bloomberg added.
The economy is ahead of fiscal restraint, so it is in a good spot right now, Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, told Bloomberg. With consumers "in the driver's seat," the recovery is sustainable, he concluded.