U.S. consumer spending rises 0.5 pct in Jan

WASHINGTON, MARCH 1 (BestGrowthStock) – U.S. consumer spending
increased slightly faster than expected in January as consumers
dipped into their savings amid a small rise in incomes, a
government report showed on Monday.

The Commerce Department said spending rose 0.5 percent,
increasing for a fourth straight month, after increasing by an
upwardly revised 0.3 percent in December. Consumer spending in
December was previously reported to have increased 0.2 percent.

Analysts polled by Reuters had expected consumer spending,
which normally accounts for over two-thirds of U.S. economic
activity, to increase 0.4 percent in January.

Consumer spending has been held back by stubbornly high
unemployment and analysts worry the economy’s recovery from the
most painful downturn since the 1930s could stumble in the
second half of the year if spending remains lackluster.

The economy expanded strongly in the second half of 2009,
driven by a sharp slowdown in the rate at which business
liquidated inventories. Analysts expect stock rebuilding and
continued improvement in business spending to support growth
into the first half of 2010.

Consumer spending rose at a modest 1.7 percent annual rate
in the fourth quarter from 2.8 percent in the prior period.

Spending adjusted for inflation rose 0.3 percent in
January, picking up from a 0.1 percent gain the prior month.
Personal income edged up 0.1 percent, a month after increasing
0.3 percent in December, the Commerce Department said. That was
well below market expectations for a 0.4 percent increase.

Real disposable income fell 0.6 percent in January, the
largest decline in seven months, after increasing 0.2 percent
the prior month.
Investing Analysis

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

U.S. consumer spending rises 0.5 pct in Jan