Consumer Spending, Income Both Jumped In February

WASHINGTON (March 29, 2013)--Consumers earned and spent in February, helped by a stronger job market that has offset some of the drag from higher taxes, the U.S. Commerce Department said Friday.

The Commerce Department said consumer spending rose 0.7 percent in February compared with January, the biggest gain in five months.

It followed a 0.4 percent rise in January, which was revised up from an initial 0.2 percent estimate.

Income rose 1.1 percent last month, which followed January's 3.7 percent plunge and December's 2.6 percent surge.

The huge swings reflected a rush to pay bonuses and dividends in December before taxes went up on high-income earners.

Sales rose last month despite an increase in Social Security taxes, which took effect in January, reducing take-home pay this year for nearly all Americans receiving a paycheck.

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