U.S. Consumer Spending Rose More Than Forecast in February

Consumer spending in the U.S. rose more than forecast in February as incomes climbed, helping to bolster the expansion in the world’s largest economy.

Purchases increased 0.7 percent, the most since October, after advancing 0.3 percent the prior month, Commerce Department figures showed today in Washington. Incomes increased 0.3 percent, less than projected, and the Federal Reserve’s preferred measure of inflation accelerated.

The U.S. added jobs for the sixth consecutive month in February and the unemployment rate fell to the lowest level since April 2009, helping cushion Americans from higher food and fuel prices. Spending is contributing to the recovery, which Fed policy makers say is on a “firmer footing.”

“The picture for consumers is that they’re spending at a moderate pace,” said Julia Coronado, chief economist for North America at BNP Paribas in New York, who correctly forecast the gain in sales. “We are on a decent pace of expansion.”

Stock-index futures held earlier gains after the report and Treasury securities fell. The contract on the Standard & Poor’s 500 Index maturing in June rose 0.3 percent to 1,313.8 at 8:44 a.m. in New York. The yield on the benchmark 10-year note, which moves inversely to prices, increased to 3.47 percent from 3.44 late on March 25.

The median estimate of 71 economists surveyed by Bloomberg News called for a 0.5 percent advance in spending after a previously reported 0.2 percent gain the prior month. Projections ranged from little change to gains of 0.8 percent.