WASHINGTON – Americans spent slightly more in February but the gain still left consumer spending growing at a modest pace, held back by severe winter weather.
The Commerce Department says consumer spending rose 0.3 percent in February following a 0.2 percent rise in January. The spending increases would have been even weaker except for a surge in spending on utility bills. In February, spending on durable goods such as autos actually dropped as consumers stayed away from auto dealerships. Service spending, which covers utility payments, rose.
Income increased 0.3 percent in February, the same amount as January.
Analysts say consumer spending, which accounts for 70 percent of economic activity, slowed significantly in the current quarter and will depress overall economic growth. But they are looking for a rebound in the second quarter.