January US consumer spending barely rose .1 percent, despite cheaper gasoline and a buoyant labor market. Economists are speculating that consumers were using their extra income to pay down debt and boost savings. This was below Wall Street’s expectations for a .4 percent increase.
“Should we be worried about the weakness of underlying sales over the past two months? Possibly,” said Paul Ashworth, chief U.S. economist at Capital Economics in Toronto.
“But all the conditions are in place for a period of very strong consumption growth. We still expect to see that strength come through in the retail sales data soon.”
The economy has added more than a million jobs in the past three months and the number of those seeking jobs hit its lowest level since 2007 in December.
Resource: Reuters
Related posts
