Consumer spending up despite bad weather as incomes also rose
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WASHINGTON -- Consumer spending exceeded expectations in January, rising despite the bad weather as incomes also grew in a positive sign for economic growth.
Spending was up 0.4% after a 0.1% gain the previous month, the Commerce Department said Monday. The December figure was revised down sharply from the initial estimate of 0.4%.
Incomes, which had been flat in December, rose 0.3% in January, meaning consumers had more money to spend.
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Economists had projected a 0.1% rise in spending and a 0.2% increase in personal income in January.
The increase in consumer spending was the best since September and came in the face of bitter cold and snow in much of the country that has helped lead to other lackluster economic data recently.
On Friday, the Commerce Department cut its estimate of fourth-quarter growth to a 2.4% annual rate from an initial estimate of 3.2% in part because of a downward revision in consumer spending.
Consumer spending, including monthly mortgage payments, accounts for about 70% of the U.S. economy.
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