Income, Spending Rates Cool Down
Americans’ incomes and spending are not rising as rapidly as they had been, the latest sign the economy is slowing to a pace that can be maintained with low inflation.
Analysts say there is widespread evidence of a slowdown in response to higher interest rates. But some economists are skeptical, suggesting the easing is only a pause.
The Commerce Department reported Monday that spending climbed a mere 0.1 percent in February, the smallest gain in nearly a year. The pickup in personal income was larger, 0.5 percent, but still the weakest since earnings were unchanged in November.
The department also said that incomes rose less rapidly in January than previously reported. The January increase was revised down to 0.7 percent from 0.9 percent.
“The figures tend to reinforce the view that growth is slowing in 1995. Almost every report has come in on the soft side,” said economist Mark Vitner of First Union Corp. in Charlotte, N.C.