U.S. Consumer Spending Stays Weak

The latest government data confirm what apparel retailers have been experiencing since the beginning of January: Consumer spending remains soft. According to the Bureau of Economic Analysis, consumer spending was weaker than what economists expected for February — posting a 0.1 percent increase, which followed two months of declines. Real personal spending (adjusted for inflation) clocked a 0.1 percent decline. Lousy weather and gas prices that have inched up were to blame, said analysts and economists. Meanwhile, personal income and disposable income both had gains of 0.4 percent while savings, wages and salaries all experienced increases. The savings rate in particular saw a considerable rise as it jumped to 5.8 percent in February, which is up from 5.5 percent in January and well above November’s rate of 4.4 percent. Wages and salaries could be better, though, said National Retail Federation chief economist Jack Kleinhenz in an interview. “Salaries and wages are not growing as fast as it needs to be,” he said adding that the outlook is still positive. “The numbers continue to show that there’s spending power out there. And they are spending, but not on goods.” Instead, Kleinhenz and others say consumers are doling out hard-earned dollars at restaurants and other services.

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