Consumer spending and incomes rose more strongly than predicted in January, with wallets swelled by year-end bonuses, the Commerce Department reported March 1. Consumer spending, a key motor of economic growth, was up 0.5% from December, while incomes increased a robust 1%.
Both the gain in spending and incomes were stronger than most economists had predicted. The markets had been anticipating that spending would rise 0.4% and that incomes would only increase 0.3%.
The rise in incomes was the strongest in a year and could feed concerns about inflationary pressures buffeting the economy. However, it was likely affected by the payment of financial bonuses on Wall Street and annual hikes in public sector incomes, according to officials.
Copyright Agence France-Presse, 2007
