US consumer spending picked up for the fifth month running in February, lifting hopes that consumers could add momentum to the economic recovery. Personal consumption expenditure rose by 0.3 per cent to $34.7bn last month, commerce department figures showed on Monday. This followed an increase of 0.4 per cent in January and was in line with economists’ expectations.
The growth in spending came as incomes were flat in February after rising for the previous four months. With consumption outpacing income growth, the US savings rate fell to 3.1 per cent, its lowest level since October 2008.
Paul Dales, US economist at Capital Economics, said that while the signs of renewed demand were encouraging, it remained a concern that consumers were dipping more heavily into their savings rather than using fresh income.
Read more here: US consumers boost hopes for robust recovery