US consumer spending increases

04 March 2009

WASHINGTON, DC: Consumer spending in the US rose by 0.6% in January after declining for six straight months, with rising purchases of food and other "nondurable" items among the main contributors to growth, according to The Commerce Department.

Evidence from prior recessions shows brands from Unilever's Lux to Apple's iPod have been launched during a downturn and gone on to be successful, as was the Renault Clio.

However, while sales of "nondurables" and food rose by 1.3%, durable goods in the US in January, more expensive items such as cars saw an uplift of just 0.1% as Americans continued to avoid making major purchases.

While personal income also increased by 0.4% over the month, the annual savings rate also reached 5%, marking the highest level since 1995.

The Commerce Department also reported that construction spending declined by 3.3% in the first month of this year.

Furthermore, the Institute for Supply Management found that manufacturing declined for the 13th successive month, though the index figure improved by 0.2 points to an index score 35.6 in January (with anything under 50 marking a contraction).

Data sourced from New York Times; additional content by WARC staff