U.S. Consumers Boost Spending After Bleak Jan.

American consumers dusted off their pocketbooks and returned to the nation’s stores last month, boosting personal consumption spending 1.7% over January levels, the government reported today.

The Commerce Department said the February jump followed a bleak January in which personal spending fell a record 2%.

Spending has swung dramatically over the last three months because of changes in the tax code. Sales taxes became non-deductible Jan. 1, and many consumers shifted their buying into December to take advantage of the old tax law, depressing the January figures.

The department said personal incomes rose 0.9% in February, a sharp boost from the 0.2% increase of January and the biggest rise since last April.

Disposable, or after-tax, income shot up an even bigger 1.2% after a 0.9% hike in January. That also was the largest rise since April.

Slowness With W-4 Forms

The department said, however, both increases were due in part to the slowness of taxpayers to file W-4 forms under the new tax law, which means that many Americans are having too little money withheld from their paychecks.

While the figures were positive, some economists were less than jubilant.

“It looks good but it really isn’t,” said Michael K. Evans of Evans Economics Inc. “The gains in personal income are really not that spectacular.”

And personal spending averaged over the last three months, to account for the tax-buying swings at year’s end, shows an increase of only 0.5%, he said.

“That’s indicative of where the economy really is,” Evans said. “Both consumption and real income are growing very slowly, much more slowly than they did last year.”

Americans’ savings rate, savings as a percentage of disposable income, fell to 3.6% from a 4% rate in January. But it was well above the record low of 1.3% in December.