US consumer spending rose slightly for a second consecutive month in February, as households increased savings, the government reported Thursday, providing the latest indication the economy lost momentum in the first quarter. The Commerce Department said consumer spending—which accounts for more than two-thirds of U.S. economic activity—increased 0.2 percent last month after a similar gain in January and a 0.4 percent advance in December. Spending on durable goods, including autos, rebounded 0.2 percent after plunging 1.5 percent in January. Spending on services rose 0.3 percent, matching January's increase. Personal income rose 0.4 percent in February and now has increased by the same amount for three consecutive months. Wages increased 0.5 percent last month after climbing 0.6 percent in January. With income rising faster than spending, savings increased to $497.4 billion in February, the highest level since last August, from $471.3 billion the previous month. The saving rate rose to a six-month high of 3.4 percent from 3.2 percent in January. Savings had fallen to a 12-year low in December. Inflation moderated last month after prices pushed higher in January. The personal consumption expenditures (PCE) price index excluding volatile food and energy rose 0.2 percent in February after advancing 0.3 percent the previous month. That lifted the year-over-year increase in core PCE to 1.6 percent, the biggest gain in a year. The core PCE index is the preferred inflation measure of the Federal Reserve (Fed), and it has remained below the central bank's 2 percent target since mid-2012.
