Confident consumers earned and spent more money in February, the government said Friday, pointing to stronger economic growth early in 1998 than most analysts had previously expected.
Meanwhile, strong growth in 1997, as reflected in the nation's tight labor markets, helped push employee turnover in the U.S. to an eight-year high last year, according to a separate survey.
Turnover--defined as workers who quit their jobs or were fired--averaged 1.1% per month last year, up from 0.9% in 1996 and the highest 12-month average since 1989, said the Bureau of National Affairs Inc., a Washington-based research firm.
Mid-size employers with 500 to 1,000 workers experienced the greatest increase in turnover in 1997. Employers in all regions faced higher attrition.
"Improvements in the job market have likely enabled people to find work elsewhere," said Michael Reidy, the bureau's director of surveys. The U.S. unemployment rate is running at its lowest level in nearly 25 years, and new jobs are being created at a fast pace.
The firm said the results were based on a survey of 428 human resource and employee relations executives across the U.S. But the survey did not take into account corporate downsizing.
The Commerce Department reported that incomes rose 0.6% to a seasonally adjusted annual rate of $7.14 trillion, after rising 0.6% in January. Spending, which fuels two-thirds of the economy, grew 0.4% to $5.66 trillion, down from a revised 0.7% increase in January.
Analysts said spending was strong enough to fuel real gross domestic product growth of 3% or more in the first quarter, up from what many had been forecasting.
Although that would be below the 3.7% rate of growth posted in the fourth quarter, it would still be a concern to the Federal Reserve Board, whose policymakers are nevertheless unlikely to raise interest rates when they meet Tuesday, analysts said.
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Seasonally adjusted annual rate, in trillions of dollars: Feb: $7.14
Source: Commerce Department