US consumer spending up tiny 0.1 percent in February

U.S. consumers increased their spending at the weakest pace in six months, while the 12-month rise in consumer prices was the largest in nearly five years. Consumer spending edged up 0.1 percent in February following a similarly sluggish 0.2 percent increase in January, the Commerce Department reported Friday. The small gains suggest that overall economic growth likely slowed in the first quarter. With the recent weakness in spending, which accounts for 70 percent of economic activity, many analysts believe growth in the January-March quarter could slow to a rate of 1.5 percent or less before accelerating in the months ahead. The February spending figure reflected in part an unusually mild winter, which sapped demand for utilities. Services, the category that covers utility payments, was up just 0.1 percent. Spending on goods was also weak, with purchases of long-lasting durable goods such as autos down 0.1 percent. Nondurable goods spending showed no change. The combination of a strong gain in incomes and modest rise in spending pushed the saving rate up to 5.6 percent of after-tax income in February, the highest level since October and up from 5.4 percent in January.