NEW YORK — Consumer spending rose 0.8% in February, the Commerce Department said Friday. It was the biggest increase since July. However, the increase came as Americans' income barely grew, and the saving rate fell to its lowest point in more than two years.
Some of the higher spending last month reflected rising gas prices. But even after excluding inflation, which was due mainly to gas prices, spending rose a solid 0.5%.
The report led economists to upwardly revise their economic growth estimates for the January-March quarter. Paul Dales, an economist at Capital Economics, now expects annual growth for the first quarter to be around 2.5%, compared with earlier estimates of about 2%, the Associated Press reported.