Consumer spending rose in January after falling for a record 6 consecutive months, pushed higher by purchases of food and other non-durable items. But the increase is expected to be fleeting given the problems facing the US economy. Spending rose 0.6% in January, better than the 0.4% gain economists expected, the Commerce Department said today.
Personal incomes rose 0.4% in January, partly reflecting cost-of-living adjustments provided to millions of Social Security recipients. Still, that was better than the 0.2% decline economists expected. The personal savings rate surged to 5%, the highest level since 1995, as consumers continued to sock away more of their income amid the deepening recession.