U.S. consumer spending up slightly

U.S. consumer spending rose slightly in February while incomes were unchanged, according to the Commerce Department.

For the fifth straight month, consumers increased their purchasing by 0.3 per cent in February. The rise compared with an increase of 0.4 per cent a month earlier.

That was the smallest increase since September, perhaps in part due to snow storms that hit the East Coast and kept shoppers away from the malls.

Analysts saw the increase as a sign the recovery continues, but at a slow pace. 

Income growth was unchanged from February at 0.3 percent. That was the weakest showing since July, when incomes actually shrank.

Personal income actually declined by 0.2 per cent once government transfers — such as jobless benefits — were stripped out of the numbers. The payout of jobless benefits rose 4.2 per cent, after falling 4.7 per cent in January.

In a commentary, TD Securities portfolio strategist Ian Pollick described the lack of growth in incomes is "disheartening," as it suggests the recovery is "disproportionately benefiting from government assistance rather than sustainable private-sector growth."

Consumers increased their spending on goods, such as food and clothing, by 0.7 per cent. That was down from a 1.7 per cent increase in January. Spending on services rose by 0.3 per cent, up from a 0.2 per cent rise in January.

But shoppers spent less on "durable" goods, such as cars and appliances, with purchases falling by 0.4 per cent. That was not as deep as the 1.4 per cent cut in January.

Inflation remained subdued. There were no price increases in categories excluding food and energy, where price changes are more volatile. 

For the second consecutive month, that measure was flat, making for an annual rate of 1.3 per cent, compared with an annualized 1.5 per cent in January.