Consumer Spending Up... Thanks to Gas Prices Personal income up 0.3%, but inflation hits hard By Matt Cantor, Newser User Posted Mar 28, 2011 10:12 AM CDT 5 comments Comments A man changes the price of gas at a station in Brunswick, Maine, on Thursday, March 24, 2011. (AP Photo/Pat Wellenbach) (Newser) – Consumer spending rose at its fastest rate in four months in February—but that’s in large part due to rising gas prices. Consumer spending climbed 0.7%, while personal income rose 0.3% following January’s 1.2% jump, the AP notes. Both gains reflected a Social Security tax cut, which boosted take-home pay. But if energy prices keep climbing, household budgets will fall, and so will spending, economists say. With inflation removed, spending only rose 0.3%, suggesting that higher-priced goods are cutting into spending power. The data provides “yet more evidence that higher prices are denting economic growth,” said an expert.