Consumer spending in the U.S. rose
in January even as incomes dropped by the most in 20 years,
showing households were weathering the payroll-tax increase by
socking away less money in the bank.
Household purchases, which account for about 70 percent of
the economy, climbed 0.2 percent after a 0.1 percent gain the
prior month, a Commerce Department report showed today in
Washington. The median estimate in a Bloomberg survey of 76
economists called for a 0.2 percent advance. Incomes slumped 3.6
percent, sending the saving rate down to the lowest level since
November 2007.
Employment gains, the rebound in housing and growing demand
for autos will probably keep supporting consumer spending in the
first quarter as the world’s largest economy picks up from an
end-of-year slowdown. Even so, rising gasoline prices and the
need to rebuild nest eggs may make it difficult for households
to match last quarter’s performance.
READ MORE: http://www.bloomberg.com/news/2013-03-01/consumer-spending-in-u-s-climbs-even-as-taxes-hurt-incomes.html
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