U.S. personal income and consumer spending both rose in February, the Commerce Department said Friday, suggesting that the economy remains resilient despite surveys showing gloomy consumer confidence.
Total personal income increased by 0.8 percent, or $194.7 billion, driven largely by wage gains and transfer payments.
Consumer spending rose 0.4 percent, or $87.8 billion, last month. The gain was driven by a $56.3 billion increase in goods spending and a $31.5 billion rise in services spending. Adjusted for inflation, real consumer spending increased by 0.1 percent, indicating that demand remains steady even as inflation continues to weigh on purchasing power.
Manufacturing wages rose one percent percent and wages in the services sector climbed 0.4 percent growth. The robust growth in manufacturing wages comes as President Trump continues his efforts to revitalize U.S. manufacturing, a central component of his economic policy agenda aimed at boosting middle-class incomes and strengthening the industrial base. They may indicate rising demand for manufacturing workers as businesses ramp up domestic production in hopes of avoiding tariffs on imports.
Disposable personal income, which measures income after taxes, rose 0.9 percent in February, while inflation-adjusted disposable income increased by 0.5 percent. The steady rise in incomes and spending is expected to support broader economic growth even as inflationary pressures continue to challenge household budgets.
The latest data highlights a broader trend of economic resilience, with income and spending growth outpacing consumer sentiment. Economists have noted that wage and income growth are more reliable indicators of economic health than consumer confidence surveys, which have been pessimistic since mid-2021.
Hard data continues to point to economic resilience, even as sentiment remains subdued.
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