Consumer Income, Spending Rise Modestly : Economy: The latest round of reports indicates a sustained, moderate recovery this year.

A raft of statistics released Monday, including a modest 0.5% increase in Americans’ personal income in January, point to a moderate and sustained economic expansion this year.

Incomes increased to a seasonally adjusted annual rate of $5.22 trillion, building on a strong 1% advance in December, the Commerce Department said. Consumer spending rose 0.3% to an annual rate of $4.23 trillion, the fifth increase in a row.

“Even though this report isn’t a barn-burner, I’m taking heart from it. After a huge surge in December, I’m happy that (income and spending) didn’t fall,” said economist Robert F. Wescott of WEFA Group, a Philadelphia-based forecasting service.

According to other reports:

* The nation’s manufacturing economy continued to expand in February but at a slightly slower pace than the previous month, according to the National Assn. of Purchasing Management. The gain was broad-based, with 16 of 20 industries reporting growth.

* Construction spending in January declined 1.3%, the first drop in five months, the Commerce Department said.

* The nation’s merchandise trade deficit narrowed 6% in the October-December quarter to $26 billion. But the deficit for all of 1992, $96.3 billion, was 31% higher than in 1991. It was the first year-to-year increase in five years.

Economists said the reports fit with their view that the economy, as measured by the gross domestic product, which is the sum of all goods and services produced in the United States, probably will expand 3% to 3.5% this year, up from 2.1% last year.

However, the 4.8% rate of growth reported during the final three months of last year probably isn’t sustainable, they said.

“There certainly isn’t a boom in prospect, but we’ll probably see steady and sustainable growth,” said economist Lynn Reaser of First Interstate Bancorp in Los Angeles.

January’s rise in consumer spending followed a 0.8% jump in December. That, along with improved consumer confidence after the election, has been behind much of the improvement in the economy in recent months.

The combination of a somewhat bigger increase in income than in spending produced a slight rise in the nation’s savings rate--savings as a percentage of income--from 4.5% in December to 4.6% in January.