Personal income and spending both increased in line with economist estimates in the month of February, the Commerce Department revealed in a report on Thursday.
The report said personal income climbed by 0.4 percent in February, matching the increases seen in the two previous months as well as expectations.
Disposable personal income, or personal income less personal current taxes, also increased by 0.4 percent in February after jumping by 1.0 percent in January.
The Commerce Department also said personal spending rose by 0.2 percent for the second consecutive month. The uptick in spending also matched estimates.
However, real spending, which is adjusted to remove price changes, came in unchanged in February after falling by 0.2 percent in January.
With income rising by more than spending, the report said personal saving as a percentage of disposable income climbed to 3.4 percent in February from 3.2 percent in January.
“It’s entirely possible – likely, even – consumption will recover now that the saving rate has risen a percentage point from its recent low,” said Chris Low, chief economist at FTN Financial.
He added, “But consumers’ weak start to the year nevertheless should alleviate some of the fear inside and outside the Fed of the need for more aggressive monetary policy to counter the effects of stimulative fiscal policy.”
A reading on inflation said to be preferred by the Federal Reserve showed the annual rate of core consumer price growth accelerated to 1.6 percent in February from 1.5 percent in January.