Consumer spending in the U.S. rose in February by the most in seven months, showing the biggest part of the economy is strengthening.
Purchases climbed 0.8%, the largest gain since July, Commerce Department figures showed today in Washington. The median estimate of economists surveyed by Bloomberg News called for a 0.6% increase. Incomes advanced less than projected, sending the saving rate to a more than two-year low.
Households may be poised to take a more active role in the expansion as the biggest payroll gains since 2006 underpin confidence. While wages are climbing, other forms of income like interest receipts are lagging behind, raising the risk that higher fuel costs will limit gains in consumer spending, which accounts for 70% of the economy.
Projections for spending in the Bloomberg survey of 83 economists ranged from gains of 0.1% to 0.8%.
Incomes climbed 0.2% for a second month after January’s gain was revised down. They were projected to increase 0.4%, according to the Bloomberg survey median.
Wages and salaries climbed 0.3% in February, while interest payments were little changed for a second month.
Income after taxes and adjusted for inflation declined 0.1% in February, the third decrease in the past four months. The decrease combined with the jump in spending pushed the saving rate down to 3.7%, the lowest level since August 2009, from 4.3% in January.
Adjusted for inflation, which are the figures used to calculate gross domestic product, consumer spending increased 0.5%, the most in five months.
