The Commerce Department released a report on Friday showing personal income in the U.S. increased more than expected in the month of February, while personal spending rose in line with economist estimates.
The report said personal income climbed by 0.6% in February, matching the increase seen in January. Economists had expected income to rise by 0.4%.
Disposable personal income, or personal income less personal current taxes, increased by 0.5%, while real disposable income, which is adjusted to remove price changes, rose by 0.4%.
Meanwhile, the Commerce Department said personal spending edged up by 0.2% for the second straight month, matching expectations.
Excluding price changes, personal spending inched up by just 0.1 percent for the third consecutive month.
“The rise in spending last month was arguably weaker than it looks given that it was largely driven by a weather-related jump in utilities spending, with underlying goods spending little changed,” said Andrew Hunter, Senior U.S. Economist at Capital Economics.
“Nevertheless, it suggests that real consumption was on course for growth of just over 1.5% annualized before the coronavirus struck,” he added. “Clearly that’s a different world now though.”
With income once again rising by much more than spending, personal saving as a percentage of disposable personal income climbed to 8.2% in February from 7.9% in January.
Economists noted the continued increase in the savings rate came as consumers opted to save more amid emerging coronavirus concerns.
A reading on inflation said to be preferred by the Federal Reserve showed the annual rate of core consumer price growth ticked up to 1.8% in February from an upwardly revised 1.7% in January.