U.S. Consumer Spending Slows, Even Though Incomes Are Growing
February 28, 2020
Americans reined in their spending in January, even though they were making more money. Consumer spending increased just 0.2 percent last month, down from December’s 0.4 percent increase. The increase was the smallest since October.
Incomes were up 0.6 percent from the month before, the biggest monthly increase in a year. The jump in income was not just due to wage growth, but an increase in Social Security benefits following a cost of living adjustment.
The data suggests that the economy was growing modestly in the weeks before the coronavirus outbreak began, so the ultimate impact on the first-quarter GDP remains to be seen.