US consumer spending edged higher in February as income growth slowed and consumer prices fell slightly, according to official data released Monday that suggested tepid expansion in the economy.
Consumer spending, which accounts for about two-thirds of the activity in the US economy, rose 0.1 percent in February, matching the previous two months’ increases, the Commerce Department said, sharply revising down January’s 0.5 percent gain.
Personal (LSE: PGH.L – news) income increased 0.2 percent last month, marking a slowdown from January’s 0.5 percent gain.
Post-tax, or disposable, personal income, rose by only half as much as in January, at 0.2 percent.
Americans boosted their savings as economic conditions appeared patchy, with financial market turbulence inducing some caution. The personal saving rate inched up to 5.4 percent from 5.3 percent in January. It (Other OTC: ITGL – news) was 5.0 percent in December.
The Federal Reserve’s preferred inflation measure weakened, remaining well below the central bank’s 2.0 percent target.
The personal consumption expenditures price index fell 0.1 percent in February after rising 0.1 percent in January, continuing its long-running hovering pattern around zero amid low oil prices.
Stripping out volatile food and energy prices, the core PCE price index was up a modest 0.1 percent for the fourth time in the past five months.
Year-over-year, PCE prices rose 1.0 percent, edging down for 1.2 percent in January, and core PCE was up 1.7 percent for the second straight month.
