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Consumer Spending Up... Thanks to Gas Prices

Personal income up 0.3%, but inflation hits hard

By Matt Cantor, Newser Staff

Posted Mar 28, 2011 10:12 AM CDT

(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.

A man changes the price of gas at a station in Brunswick, Maine, on Thursday, March 24, 2011. (AP Photo/Pat Wellenbach)

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COMMENTS

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Showing 3 of 5 comments

myflap.blow

Mar 28, 2011 2:17 PM CDT

McCain was right! The fundamentals ARE strong!

dilts2

Mar 28, 2011 12:53 PM CDT

QUICK ECONOMIST think this means the economy is turning around because more money is being spent... and in Fact this will drive the economy down!! I love watching a Superpower go to 3rd world country

Veritas

Mar 28, 2011 11:16 AM CDT

1) Tax breaks for us don't bring about jobs or help employment..las time we raised taxes employment went up..the only people that make gains with tax cuts for us are CEO's and corporations. 2) Wages have not gone up as much as they have in the past..any raise is usually taken by the states via increases in income taxes..on bank rates ans costs. Gas prices. and now the huge spike in food prices.And now with the GOP gov's going after unions..those that support that move can look for less money and fewer raises for ll.why? the increases unions received historucally translate into wage increases for all workers..with unions gone the GOP and corporstions have what they want..worker bees that have no say so..crass americans uninformed and self-destructive..and no energy to protest like other people throughout the world

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Consumer Spending Up... Thanks to Gas Prices

Personal income up 0.3%, but inflation hits hard

OTHER STORIES ON OUR RADAR

inflation • income • consumer spending • gas prices • economy

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