FEBRUARY SEES LARGER

February Sees Larger-Than-Expected Increase In Personal Spending – Image via Wikipedia

Personal income edged up in February but increases were below predicted amounts, according to Monday’s data from the Commerce Department. Also unexpected: a larger-than-anticipated climb in personal spending amounts.

Commerce Department statistics indicate a February rise of 0.3% from January’s revised 1.2%, corrected to reflect a larger increase than previously calculated. Economic experts had predicted personal income’s growth would be slightly speedier, more like 0.4%.

More grudging numbers for growth failed to inhibit spending, however. After January’s 0.3% improvement, February improved on the improvement with a 0.7% jump. Personal spending projections ran around 0.6%.

February’s healthier spending figures run parallel with improvements seen in October of last year, the most significant positive data since mid-year, 2009.

Total figures for personal savings ended up at $676.7 billion as of February, as opposed to January totals of $710.5 billion. The figure, calculated by subtracting personal necessities from one’s disposable income, is an indicator that Americans may be moving back to their old habits (more spending, less saving).

Personal savings amounts — when measured as a disposable income percentage — also represented a decline in February, down from January’s 6.1% to the current 5.8%.

“Bottom line, the key to the economy is still mostly spending,” commented equity strategist Peter Boockvar of Miller Tabak, “and what drives this are job gains and income growth above the rate of inflation.”