WASHINGTON (3/4/14)--Americans' personal spending ramped up in January primarily because of services being purchased not physical goods, according to Monday's report from the Commerce Department.
Services rose 0.9%--the largest jump since October 2001. The Affordable Care Act pushed spending in the health-care arena, including enrollment in insurance exchanges.
Winter weather continues to affect the economy with consumers spending more on utilities, tightening budgets and reducing product consumption, according to analysts at Moody's (Economy.com March 3).
February numbers will likely be just as erratic given the severe weather. Shoppers and travelers stayed home, and construction was hindered. "The outlook is more uncertain than usual," Paul Dales, senior U.S. economist at Capital Economics, told The Wall Street Journal (March 3).
Excluding special factors such as health-care allowances, cost-of-living adjustments and the expiration of the long-term unemployment benefits, personal income increased $23.7 billion (0.2%) in January, compared with a decrease of $15.1 billion (0.1%) in December.
Disposable personal income, which is personal income less personal current taxes, rose $45.2 billion, or 0.4% in January, compared with the $9.7 billion decrease (-0.1%) in December, the Commerce Department reported.