Consumer Spending, Good News | featured news

U.S. consumer spending rose less than expected in January as households took advantage of the largest increase in incomes in more than 1-1/2 years.

The U.S. economy grew more than previously calculated in the third quarter, led by stronger consumer spending and fueled by labor income gains that may stoke demand into 2011.

Consumer spending rose at the strongest pace in four months in July, supported by a small gain in incomes, offering hope that consumers will be able to keep contributing to a modest recovery.

The 0.3 percent rise in consumer spending in February was considered a respectable showing, given the winter weather.

U.S. stocks opened higher, led by the material and energy sectors following the report of a small increase in personal spending and benign inflation.

Personal incomes rose more than expected in December and consumer spending increased for the third straight month, helping the economy slowly recover from the worst recession in decades.

Data, coupled with new information on jobless claims, provides a bit of hope for the economy.

U.S. consumers spent more in June and pending sales of previously owned homes also rose, data issued on Tuesday showed, but the biggest drop in incomes in four-and-a-half years pointed to a slow recovery from the worst recession in decades.

Weak consumer spending continued in April, but some retailers posted sales gains, or slighter declines than in the past.