Page 7 - Aruba Today

U.S. NEWS A7
Tuesday 29 March 2016

US Financial Front:

American consumer spending posts February increase

M. CRUTSINGER ter. which fuels about 70 per-
AP Economics Writer cent of the economy, off
WASHINGTON (AP) — Consumer spending edged to a weak start in 2016,
U.S. consumers barely in- some analysts predict just 1
creased their spending in up a tiny 0.1 percent last percent annual economic
February and spent less in growth in the first quarter —
January than the govern- month, the Commerce half the increase they had
ment had earlier estimat- earlier foreseen.
ed. The pullback led some Department said Monday. “Consumers got off to a
analysts to downgrade soggy start this year,” said
their expectations for the And it revised down its es- Sal Guatieri, senior econo-
economy’s growth during mist at BMO Capital Mar-
the January-March quar- timate of spending growth kets. But Guatieri said he still

in January from a solid 0.5

percent gain to a much

weaker 0.1 percent, which

matched December’s

lackluster figure.

With consumer spending,

In this Wednesday, March 23, 2016, photo, a couple walks past
the Shadyside Variety Store in the Shadyside section of Pitts-
burgh. On Monday, March 28, 2016, the government reported
on U.S. consumer spending and income for February.

(AP Photo/Gene J. Puskar)

expects an acceleration as Rupkey suggested that the
the year progresses, driven tepid spending increases
by solid job growth and low in January and February
borrowing costs. showed that consumers
The report showed that had turned cautious at
incomes edged up just the start of the year in the
0.2 percent in February, face of “stock market tur-
though that followed a bulence and increasing
robust 0.5 percent gain downside risks from the
in January, the strongest world economy.”
income growth in seven A key price gauge followed
months. by the Federal Reserve
Economists have been showed that prices fell 0.1
surprised that lower gas percent in February and
prices have yet to drive have risen just 1 percent
more spending. But some over the past 12 months,
suggested that many well below the Fed’s infla-
households may have de- tion target of 2 percent.
cided to increase savings Last month’s weakness in
first and spend more later. spending had been ex-
Monday’s spending report pected given an earlier
showed that the saving report which showed that
rate rose to 5.4 percent of retail sales fell in February,
after-tax income in Febru- pulled down by falling gas-
ary, up from 5.3 percent in oline sales.
January to the highest level On Friday, the government
in a year. revised its estimate for over-
“The good news is the con- all economic growth, as
sumer has plenty of powder measured by the gross do-
to shoot with if the outlook mestic product. It showed
starts to improve, with all the economy growing at
the money they have set an annual rate of 1.4 per-
aside for a rainy day,” said cent in the fourth quarter,
Chris Rupkey, chief finan- an improvement from a
cial economist at MUFG previous estimate of 1 per-
Union Bank in New York. cent.