Spending, Income and Inflation Up

Washington, DC, March 30, 2007--Personal spending rose 0.6 percent in February, followed a 0.5 percent January increase, according to a Commerce Department report Friday. Personal incomes, according to the report were also up 0.6 percent after a 1 percent gain in January.

The Federal Reserve's preferred measure of inflation the core personal consumption price index, rose 0.3% in February, the biggest gain since August. Core inflation matched economists' expectations. On a year-over-year basis, core inflation rose to 2.4% from 2.2%.

The report said spending adjusted for inflation increased 0.2 percent after rising 0.3 percent the January.

Economists had forecast a 0.3 percent rise in spending. The increase in spending matched the gain in incomes, as a result, the savings rate held at 1.2 percent.

Disposable income, or the money left over after taxes, rose 0.5 percent after rising 0.8 percent the previous month. Adjusted for inflation, disposable income rose 0.1 percent after a 0.6 percent increase.