US consumer spending up 0.3% in February
According to the Commerce Department, consumer spending in the US rose for a fifth consecutive month in February, by 0.3%, as widely expected.
The rise in consumer spending, which makes up for more than two-thirds of overall economic activity in the US, followed a revised 0.4% rise in January.
According to the data, consumers increased their spending on food and clothing, by 0.7%. However, consumers spent less on “durable” goods, such as cars and appliances, with purchases falling by 0.4 %.
Meanwhile, the data said personal incomes were unchanged from February at 0.3% – the weakest level since last July, markets had expected a reading of 0.1%.
Commenting on the data, Chris Low, chief economist at FTN Financial in New York, said: “I guess the big takeaway is that consumers are comfortably consuming again. We have positive numbers five months in a row since October, which I guess is a good sign.”
In related news, last week the Commerce Department revealed that the world’s no.1 economy grew at a slower rate in the fourth quarter than previous estimates showed.
According to official figures, the US economy grew by an annualised 5.6% between the October and December period, rather than the 5.9% and the 5.7% previously estimated.
For the whole of 2009, GDP fell at an unrevised 2.4% – this represented the largest full-year contraction since the 10.9% fall after the Second World War.
The Commerce department said the revisions were attributed to weaker personal and Government consumption, and lower investment.
“The pickup in real GDP also reflects rebounds in business investment in equipment and software and in net exports,” the Commerce Department said.
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