Americans Made More, Saved More in Feb. Than in Jan.

Americans made more money in February than in January and socked away a greater portion of it in savings, the Commerce Department said today.

Personal incomes climbed 0.9% last month to a seasonally adjusted annual rate of $4.64 trillion--the biggest monthly rise in nearly a year since a 1% gain in March last year.

But the rate of increase in personal consumption spending last month slowed sharply to 0.4% for a total seasonally adjusted annual rate of $3.63 trillion. That followed a 1.0% increase in spending in each of January and February.

The higher earnings and more conservative spending pushed up the U.S. savings rate to 5.7% from 5.3% in January.

Personal spending is the main engine of economic growth in the United States, accounting for about two-thirds of demand for total goods and services output, or GNP.

The department reported Wednesday that GNP growth in the final three months was at a relatively weak annual rate of 1.1%, the poorest quarterly performance in more than three years.

Personal savings went up to a seasonally adjusted annual rate of $225 billion in February from $206 billion in January.

While economic policy-makers have deplored Americans’ low savings rates in comparison with those of the rest of the world, the Bush Administration has simultaneously expressed concern that high interest rates might curb spending and slow expansion.

The Treasury Department is reportedly urging the Federal Reserve Board--the central bank that manipulates credit availability through its control of money supply policy--not to keep interest rates so high that they will discourage borrowing and investment.