WASHINGTON – Consumers spending slumped 1% as severe winter storms raked portions of the U.S. and personal incomes fell sharply as well in February.
The drop in spending came after a big 3.4% gain in January, the Commerce Department reported Friday. Consumer spending is closely watched because it accounts for two-thirds of economic activity.
Personal incomes, which can fuel spending going forward, plunged 7.1% last month after a 10.1% surge in January, when the U.S.
was sending out $600 individual payments to help Americans during the pandemic. Incomes are expected to rebound in March with millions of $1,400 individual payments being distributed.