Washington, D.C., Mar. 1--Consumers' spending and income rose in January but the pace slowed. A decrease in taxes helped boost disposable personal income and the personal savings rate.
Personal consumption increased 0.4%, after advancing 0.5% in December, the Commerce Department reported Monday.
Income rose 0.2%, the slowest pace in five months, after a 0.3% gain a month earlier.
Economists had expected spending to rise 0.4% and income to climb 0.6%, according to a survey by Dow Jones Newswires and CNBC.
Spending on durable goods, which are items such as cars and appliances that are meant to last three years or more, tumbled 3.3%, after a 1.7% increase a month earlier. Spending on nondurable goods, items such as food and clothing, rose 1.5%, after a 0.2% rise. Spending on services grew 0.7%.
An inflation measure in the report eased. A price index for personal consumption expenditures excluding food and energy increased at a 0.1% rate from the previous month, after registering a 0.2% pace in December.
Disposable personal income, or income after taxes, rose 0.8%, boosted by a large decrease in taxes, after a 0.3% gain a month earlier. Lower taxes also helped boost personal saving as a percentage of disposable personal income, which rose to 1.8% from 1.4%.
In annual terms, personal consumption expenditures less food and energy rose 0.8% in January. Such spending was up 0.7% in December from the same period a year earlier.
