Washington, DC, United States (4E) – Spending by consumers in the U.S. increased in February by the most in the past three months due to higher incomes that encouraged Americans to make purchases in stores, following a severe winter that slowed down the economy.
On a seasonally adjusted basis, consumer spending picked up by 0.3 percent in February, according to the Department of Commerce report released Friday. The previous month’s figure was revised downward to register a gain of just 0.2 percent from the previous reading of 0.4 percent, after a 0.1 percent rise in December.
Inflation-adjusted disposable income — the money that remains after taxes – climbed 0.3 percent, the fastest pace since September last year. The figure gained 2.1 percent from a year earlier. Wages and salaries rose 0.2 percent following an increase of 0.3 percent.
Durable goods purchases, which includes autos, rose 0.1 percent after adjusting for inflation after falling 0.4 percent in January. Spending for non-durable goods, which includes gasoline, climbed 0.3 percent.
Friday’s report also showed the core price measure, excluding the volatile fuel and food costs, increased 1.1 percent from the previous year, staying at the same pace as in January.
Total prices, which are closely monitored by U.S. Federal Reserve policy makers, rose 0.9 percent from February last year, the smallest on year increase since October, but still way bwlow the central bank’s target of 2 percent.