Manufacturing and consumer spending edge up
Two reports out today suggest economic growth has been moderate in the US since the beginning of the year. Consumer spending rose more than expected in January, according to the Commerce Department, likely because of high demand for heating.
Additionally, the Institute for Supply Management reported that its manufacturing index rose to 53.2 from the previous month (anything above 50 indicates expansion). Here’s what recent manufacturing growth looks like:
While the February manufacturing number was higher than expected, Reuters points out that “there were some cautionary notes, as the production subindex sank to 48.2 from 54.8, notching its third straight month of declines and falling below 50 for the first time since August 2012. The employment index held flat at 52.3.”
US consumer spending, meanwhile, rose by 0.4%, while personal income rose 0.3% in January. Here’s more from Reuters:
January’s increase in spending was driven by a 0.9 percent jump in services, the biggest gain since October 2001. That likely reflected a increase in demand for utilities as Americans tried to keep warm during an unusually cold spell.
With households spending more on utilities, outlays on goods fell 0.6 percent in January.
Despite the services-driven rise in spending, inflation pressures remained muted.
Excluding food and energy, the price index for consumer spending edged up 0.1 percent, rising by the same margin for a seventh straight month. Core prices were up 1.1 percent from a year ago, after rising 1.2 percent in December.