Consumer spending drops 0.2 percent in January

[Omaha Steve]

Source: AP-Excite

By MARTIN CRUTSINGER

WASHINGTON (AP) — Consumer spending fell for a second consecutive month in January, weakness that was expected to be temporary. Income rose, reflecting strong job gains during the month.

Consumer spending declined 0.2 percent in January following a 0.3 percent drop in December, the Commerce Department reported Monday. Economists had expected a dip, reflecting a big drop in gas prices during the month. That decline should prove to be a positive for the economy, giving consumers more money to spend on other goods.

Income grew 0.3 percent in January as wages and salaries increased a strong $42.4 billion. Analysts expect that solid job gains and low unemployment will bolster consumer spending and lift economic growth this year to what they predict will be the fastest pace in a decade.

Consumer spending, after removing the impact of price changes, actually rose a solid 0.3 percent in January and after-tax income, after removing inflation, was up 0.9 percent. Paul Ashworth, chief U.S. economist at Capital Economics, said the surge in inflation-adjusted income showed the support households will be getting from falling energy prices.

FULL story at link.



In this Friday, Feb. 6, 2015 photo, a shopper pays for produce at a Farmers Market in downtown Los Angeles. The Commerce Department releases its January report on consumer spending, which accounts for 70 percent of economic activity, on Monday, March 2, 2015. (AP Photo/Richard Vogel)

Read more: By MARTIN CRUTSINGER

[Fred Sanders]

1. "Consumer Spending Set to Soar Due to Low Gas Prices", could also be the headline..and accurate.

[wolfie001]

2. Not to say that the economy's been booming but....

....I'm sure the weather has held back spending on 100 million people in the Mid-Atlantic and North-Eastern states. I'm estimating the population so please no pointed-headed expertry (new word) required. Thanks

[AllyCat]

3. Because people have not had a flippin' raise!

We cannot base our entire economy on consumption. We need to make things and get a frickin' RAISE!!!

[durablend]

4. Gas has already shot up everywhere

And likely will continue so expect those numbers to get even worse.

[jamzrockz]

5. Shot up?

really? I don't really think its fair to call a 20c or lower increase as shooting up when prices are still $1 and change lower than it was this time last year.

Luckily I was able to save more money for more rainy day. I bet if they ran the numbers for saving and debt repayment, those numbers would show a big rise. I just hope this battle with Russia continues into 2017, this way, I can save even way more on my energy cost.

[titaniumsalute]

6. I understand the economy is still tough

But I would also assume that for millions in the north and northeast that the snow and sub-zero temps have really put the halt on spending. Who the hell is out buying shit, going out to dinner, etc. when it is white out conditions and -5 degrees? Not me baby!