Washington, DC, Mar. 26--Americans' incomes rose in February at a pace that was double that of consumer spending, sending the savings rate to its highest level in six months.
Personal income increased 0.4% last month, after climbing a revised 0.3% in January, the Commerce Department reported Friday. Spending rose 0.2% after a revised 0.5% gain.
Economists had expected increases of 0.3% and 0.4% in income and spending, respectively, according to a survey by Dow Jones Newswires and CNBC.
Disposable personal income, or income after taxes, climbed 0.4%, after January's 0.9% advance.
Spending on durable goods--items such as cars and appliances that are meant to last three years or more--slipped 0.2%, after a 3.2% plunge in January. Spending on nondurable goods such as food and clothing inched up 0.1%, after surging 1.8%. Spending on services grew 0.4%.
Consumer spending is important to economic growth; it is responsible for about two-thirds of gross domestic product.
Personal saving as a percentage of disposable personal income rose to 1.9% from 1.8% in January. February's rate was the highest since the 1.9% recorded in October. The level of savings in February, at $165.3 billion, was the highest since $227.3 billion in August.
An inflation measure in the report was flat. A price index for personal consumption expenditures excluding food and energy inched up in February from the prior month at a 0.1% rate--matching the month-to-month change in January from December.
Personal consumption expenditures less food and energy rose 1.1% in February from the same month in 2003. The year-over-year climb in January was 1.0%.
