U.S. personal spending in
January registered the smallest increase in four months as
consumers scaled back car purchases and saved more amid the
prospect of war, economists said they expect the government to
report today.
Consumer spending probably rose 0.1 percent in January at an
annual rate to $7.475 trillion, a survey of economists found. That
would follow a 0.9 percent rise in December. Incomes probably rose
0.4 percent, the sixth straight monthly rise, the survey showed.
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Automakers such as General Motors Corp. offered no-interest
loans last year and inflation has remained tame, encouraging
consumers to keep spending. As the possibility of a war with Iraq
looms and energy prices rise, consumers are holding onto more
income and curtailing purchases, economists said.
“Consumers are cautious,” said Gary Thayer, chief economist
at A.G. Edwards & Sons Inc. in St. Louis. “They’re not willing to
just buy at any price — they want a bargain.”
Bloomberg News
