Consumer Spending Edged Up 0.7 Percent

Consumer Spending Edged Up 0.7 Percent

Consumer spending in the U.S. rose 0.7 percent in February, the Commerce Department said, but the numbers were boosted by higher gasoline prices that could cut into retail purchases in the months ahead.

Consumer spending accounts for 70 percent of U.S. economic activity and is closely watched as a barometer of freight transportation demand. Trans-Pacific containerized imports posted a year-to-year gain of 11.6 percent in January as total U.S. containerized imports rose 12.3, according to PIERS, a Journal of Commerce sister company.

February's increase in consumer spending followed an increase of 0.3 percent in January, the smallest gain since June. January's weak sales were blamed largely on bad weather across much of the nation.

The Federal Reserve said last week that spending is contributing to an economic recovery that is on a "firmer footing." The U.S. added jobs for the sixth consecutive month in February and the unemployment rate fell to 8.9 percent, its lowest level since April 2009. Incomes rose 0.3 percent, less than economists expected.

The Commerce Department said inflation rose 1.6 percent year-to-year last month, after Monday's report also showed inflation picked up. The gauge tied to spending patterns increased 1.6 percent from February 2010, compared with a 1.2 percent gain in the 12 months ended in January.

-- Contact Joseph Bonney at jbonney@joc.com.