Mario Tama/Getty Images
Industryweek 8352 Shopping2
Industryweek 8352 Shopping2
Industryweek 8352 Shopping2
Industryweek 8352 Shopping2
Industryweek 8352 Shopping2

US Consumer Spending, Incomes Rise; Inflation Slumps

March 3, 2015
Americans socked away more money in January as disposable personal incomes grew. The personal saving rate, a percentage of disposable personal income, rose a half percentage point to 5.5%.

WASHINGTON - U.S. consumer spending and incomes rose in January as a decline in consumer prices picked up speed, Commerce Department data released Monday showed.

Consumer spending, which drives about 70% of the economy's activity, rose 0.3% in January, rebounding from a slight 0.1% dip in December, according to data adjusted for price changes. Without the price adjustments, spending fell 0.2%.

Personal income rose 0.3% for the second month in a row. However in January, wages and salaries, the lion's share of income, jumped 0.6% after a 0.1% rise the prior month.

Americans socked away more money in January as disposable personal incomes grew. The personal saving rate, a percentage of disposable personal income, rose a half percentage point to 5.5%.

"The American consumer is starting the year off on a fairly positive note," said Jennifer Lee, senior economist at BMO Capital Markets.

Lee said stronger job growth, which boosted wages and salaries and, thus, personal incomes, "gave consumers more support for some saving, and some spending."

Inflation continued to weaken amid declines in food and, most of all, energy prices, down 10.4% as crude oil prices fell. The personal consumption expenditures price index slid 0.5% in January, accelerating from a 0.2% drop in December.

Excluding food and energy, core PCE prices, the Federal Reserve's preferred inflation measure, edged up 0.1% in January after a nearly flat increase in the prior month and was up 1.3% year-over-year. The Fed's longer-term inflation target is 2.0%.

Copyright Agence France-Presse, 2015

Popular Sponsored Recommendations

Power Your Facilities with a Wind Turbine and Save Big!

Jan. 22, 2024
Discover how the Inflation Reduction Act makes wind turbines a savvy investment for businesses and facilities. Unlock substantial savings and a greener future with EWT's cutting...

6 Steps for Implementing Agile Mobile Robots

March 24, 2024
Discover how to get started with game changing automation.

Discrete and Process Manufacturing 2024 Trends and Outlook for North America

Oct. 29, 2023
Manufacturers are reaping the benefits of automation and cloud-based solutions. Discover what is driving today's industry trends and how they can shape your growth priorities ...

Why Additive, Why Now?

June 29, 2023
Discover the immediate impact additive manufacturing can have on your business.

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!