WASHINGTON - Consumer spending in the United States climbed more than forecast in January as incomes increased, making it more likely the biggest part of the economy will be able to sustain growth in early 2014.
Household purchases, which account for about 70 percent of the economy, rose 0.4 percent, after a 0.1 percent gain the prior month that was smaller than previously estimated, Commerce Department figures showed today in Washington, D.C. The median forecast of 76 economists in a Bloomberg survey called for a 0.1 percent rise. Incomes advanced 0.3 percent.
The report is in sync with recent data that indicate Americans are starting to shake off the effect of the harsh winter and confidence in the world’s largest economy is edging up. Improvement in hiring and rising wealth underpinned by housing and stock-market gains will keep providing consumers with the means to spend.
“Consumer spending had OK momentum” in January, Brian Jones, senior U.S. economist at Societe Generale in New York, said before the report. “We expect to see better job growth in the spring. More people with jobs means more money to spend.”
Projections for spending in the Bloomberg survey ranged from a 0.1 percent drop to a gain of 0.5 percent. The December reading was previously reported as an increase of 0.4 percent.