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US consumer spending up 0.4 per cent in January while income increased 0.3 per cent

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FILE - In this Jan. 14, 2014 file photo, pedestrians pass an H&M storefront window advertising discounts up to 75%, in New York. The Commerce Department reports how much consumers spent and earned in January on Monday, March 3, 2014. (AP Photo/Mark Lennihan, File)

WASHINGTON – Americans boosted spending in January despite the harsh winter weather but activity was much weaker in December than initially reported.

The Commerce Department says that spending rose 0.4 per cent in January following a tiny 0.1 per cent gain in December which had initially been reported as a stronger 0.4 per cent increase. Income grew 0.3 per cent in January following no increase at all in December.

The spending gain was better than expected but it came after the sharp downward revision in December.

Consumer spending is closely watched because it drives 70 per cent of economic activity. The government reported Friday that the overall economy grew at a 2.4 per cent annual rate in the fourth quarter, down sharply from an initial estimate of 3.2 per cent growth during the quarter.

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