The Commerce Department said on Friday that consumer spending increased 0.3 percent last month after rising by a revised 0.2 percent in January. Spending was previously reported to have increased 0.4 percent in January.
Economists polled by Reuters had forecast consumer spending, which accounts for more than two-thirds of U.S. economic activity, rising 0.3 percent in February.
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Consumer spending rose in February, disposable income too, the Commerce Department said.
Spending in February was lifted by an increase in services consumption, likely because of increased demand for health care and utilities.
When adjusted for inflation, consumer spending rose 0.2 percent in February after gaining 0.1 percent in January.
This so-called real spending measure goes into the calculation of gross domestic product. Consumer spending rose at its fastest pace in three years in the fourth quarter, helping to lift the economy to an annualized pace of 2.6 percent during the period.
Income rose 0.3 percent last month after rising by the same margin in January. It continues to be supported by government transfers for healthcare payments.
Income at the disposal of households after adjusting for inflation rose 0.3 percent. The saving rate, which is the percentage of disposable income households are socking away, rose to 4.3 percent last month from 4.2 percent in January.
First published March 28 2014, 6:17 AM