Washington, USA, February 26. After months of deflation, US consumers increased their spending 2.4% in January, the largest increase in seven months, indicating that the economy may be on the verge of maintaining recovery from the pandemic recession.
A report released on Friday by the Commerce Department indicated that personal income, which is spending fuel, rose 10% last month, the largest gain in nine months, driven by more cash payments than Americans got from the government.
The rise in consumption in January came after two consecutive monthly declines in spending which raised concerns that shoppers, who drive most of the economy, are paralyzed and too busy to travel, shop and spend. The sharp rise last month indicates that many people are becoming more confident in their ability to spend, especially after receiving the $ 600 checks that were issued to most adult Americans last month as part of the federal economic aid package.
Mark Zandi, chief economist at Moody’s Analytics, said, “The economy weakened late last year as financial support dwindled and the epidemic worsened, but now it appears that it is returning to life.”
The government also reported that inflation, as favored by the Federal Reserve, rose by a moderate 0.3% in January. Thus, prices have only increased 1.5% in the past 12 months, well below the 2% target set by the Federal Reserve.