US consumer spending up modestly in February as incomes rose

Americans increased their spending just 0.2 per cent in February, while their incomes were boosted by increased wages and business owners’ income.

The Commerce Department says the modest spending increase followed an equal gain in January and a rise of 0.4 per cent in December. Incomes increased a healthy 0.4 per cent.

A closely watched signpost, consumer spending accounts for about 70 per cent of U.S. economic activity.

After-tax income jumped 0.4 per cent. With consumers holding back on spending, the savings rate rose to 3.4 per cent — the highest since last August. The rate was 3.2 per cent in January. Savings had fallen to a 12-year low in December.