Consumer Spending Up in February, But Income Flat

Online shopping Sluggish personal income and a slight gain in consumer spending – the fifth consecutive month with an increase – reinforced signs of at least a mild economic recovery, enough to give equity and commodities markets a boost today.
Personal income increased $1.2 billion, or less than 0.1 percent, in February, after climbing 0.3 percent in January, the Commerce Department reported.
Personal spending increased $34.7 billion, or 0.3 percent, in February, after a revised increase of $38.5 billion, or 0.4 percent, in January.
Both figures were within analysts’ expectations.
Consumers saved $340 billion, or 3.1 percent of their disposable income in February, compared to $374.9 billion or 3.4 percent of disposable income in January, Commerce said.
Despite the somewhat encouraging consumer spending report, credit delinquencies and loss wages still weigh heavily on many Americans, prolonging the foreclosure crisis as unemployment remains the primary reason for mortgage defaults. 
Since Friday, U.S. Treasury officials have announced the expansion of two foreclosure prevention programs. One targets the hardest hit areas of some states, and the other launches a new phase of the government’s primary mortgage modification campaign.
On Friday, the Commerce Department said economic growth in the fourth quarter of 2009 increased slightly less than first reported. The gross domestic product, a key barometer of economic activity, registered at an annualized rate of 5.6 percent, instead of the initial rate of 5.9 percent.

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