Americans' personal income rose 0.5% in January but was outstripped by a 0.6% increase in consumer spending, the government said today.
The income increase was attributed largely to pay raises for federal civilian and military employees and cost-of-living adjustments in several federal pension and other government benefit programs.
Without those and other factors, the Commerce Department report said, the January income increase would have been just 0.1%. Incomes were up 0.4% in December.
The consumer spending figure continued a slight downward trend that started in December, when there had been an 0.8% increase over the previous month. Consumer spending, which includes virtually everything except interest payments on debt, was up 0.9% in November.
Analysts have generally agreed that relatively strong consumer spending has been the driving force in an economic rebound registered over the last several months.
Overall personal consumption spending increased $13.5 billion in January compared with $18.1 billion in December. But purchases of durable goods such as automobiles and appliances dipped $1.6 billion in January, compared with a $9.1-billion increase in December.
Because of an unusually cold January, after a mild December, purchases of services increased $15.3 billion in January compared with a $2.9-billion increase in December. When purchases of electricity and heating gas are removed, however, service purchases increased only $7.1 billion in January--less than December's $10.1 billion.
Personal saving rose slightly to an annual rate of $155 billion in January, compared with $154.9 billion in December. That left the national savings rate--savings as a percentage of disposable income--at 5.8% compared to 6% in December.