US consumer spending rose more than expected in January but personal income barely budged amid a fragile economic recovery, the government said Monday.
Personal expenditures increased 0.5 percent led by non-durable goods while income edged up only 0.1 percent, the slowest growth in four months, the Commerce Department said in a report.
Most experts had expected both spending and income to rise 0.4 percent in the first month of the year.
Analysts were concerned whether the lackluster income growth would depress spending in the months ahead.
The department said that January spending and income rose by a uniform, revised 0.3 percent.
Personal income posted its slowest growth since September despite improved growth in wage income.
Income in January was adversely impacted by declines in asset income, particularly dividend income, proprietors\' income, and rental income, the government figures showed.
Contributions to government and social insurance rose dramatically due to increased unemployment insurance rates, another large drag on total income.
Disposable income fell 0.4 percent because of a surge in tax payments.
"The question of where consumers are going to get the cash needed to grow their spending and put their financial houses in order was again brought to the forefront by the most recent income and spending data," said Scott Hoyt, senior director of consumer economics for Moody\'s Economy.com.
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