U.S. Personal Income Rose in January as Spending Eased

U.S. personal income rose in January, but spending fell slightly after a jump in December.

Personal income rose 0.3% in January, after a revised 0.3% gain in December, the Commerce Department (news - web sites) said Monday. However, personal consumption fell 0.1% during the month after a revised December increase of 1.0%. Income and consumption for December had originally been reported as increases of 0.4% and 0.9%, respectively.

The January figures mark the sixth straight month of steady 0.3% rises in income, and the first decline in spending since September.

The report was in line with Wall Street expectations. A Dow Jones Newswires- CNBC survey of 11 economists had called for January personal income to grow 0.4% , and for unchanged spending. Consumer spending accounts for about two-thirds of U.S. gross domestic product.

The report showed that disposable personal income, or income after taxes rose 0.3%, after a 0.4% gain in December.

Spending on durable goods, or items meant to last three years or more, dropped 5.7% in January, the largest decline since a 6.0% plunge in February 1990. In December, spending on durable goods rose 6.8%. Spending on nondurable goods rose 1.3% in January.

The income gains coupled with spending restraint brought the savings rate to 4.3% in January, up from 3.9% in December.

Source: Dow Jones