Consumer spending, income inch up in February

The department’s Bureau of Economic Analysis reported a 0.7 percent rise in consumer spending in February, a 0.3 percent jump after accounting for inflation. 

Personal income also grew 0.3 percent, but, once inflation was considered, incomes were actually seen as decreasing 0.1 percent. 

The government said the personal income figure was a bit under private sector forecasts of 0.4 percent, while Reuters reported that economists it polled expected a 0.6 percent bump in personal spending.

Mark Doms, Commerce’s chief economist, said in a statement that “the good news in today’s report is that wages and salaries – an important and large component of personal income – are strong and rising.”

The income and spending report comes days after Commerce’s latest estimate said the economy grew 3.1 percent in 2010’s fourth quarter. 

The personal consumption expenditures price index, an inflation measure, rose 0.4 percent in February, higher than January’s 0.3 percent increase. Excluding food and energy, the PCE price index grew 0.2 percent in February, the same jump as the previous month

Personal incomes did not grow as much in February as in January, when they increased 1.2 percent.

The tax-cut compromise reached late last year, which included a temporary decrease in payroll taxes, is seen as playing a role in the increases in both consumer spending and personal income.