(Bloomberg) — Consumer purchases rose less than projected in February, indicating the biggest part of the U.S. economy will find it hard to sustain momentum after the best quarter since 2006.
The 0.1 percent gain in consumer purchases followed a 0.2 percent drop the prior month, Commerce Department figures showed Monday in Washington. The median forecast of 74 economists in a Bloomberg survey called for a 0.2 percent gain. Adjusted for inflation, spending declined for the first time in almost a year.
Frigid temperatures and snow in much of the Northeast and Midwest last month emptied malls and auto-dealer lots as Americans huddled at home to keep warm. While warmer weather may bring out shoppers, steady gains in payrolls have yet to foster bigger wage gains, which would help bolster spending.
“Consumer spending is looking soft here, some of it was the weather effect,” Tom Porcelli, chief U.S. economist at RBC Capital Markets LLC in New York, the top spending forecaster over the past two years, according to data compiled by Bloomberg. Consumption “will come back in the second quarter.”
Stock-index futures held earlier gains after the report. The contract on the Standard & Poor’s 500 Index maturing in June rose 0.5 percent to 2,062.6 at 8:55 a.m. in New York amid corporate mergers and optimism central banks will support global growth.
Projections for spending ranged from little changed to a 0.5 percent gain. The previous month’s reading was initially reported as a decline of 0.2 percent.
Incomes climbed 0.4 percent in February for a second month, propelled by a jump in dividends. The Bloomberg survey median called for incomes to rise 0.3 percent. The prior month’s income figure was previously reported as a 0.3 percent gain.
Wages and salaries increased 0.3 percent after a 0.6 percent gain in January.
The economy expanded at a 2.2 percent annualized rate in the fourth quarter, led by the biggest gain in consumer spending in eight years, revised Commerce Department data showed Friday. The 4.4 percent jump in household purchases was the most since the first three months of 2006 and reflected bigger outlays on health care than previously estimated.
Last quarter’s surge in purchases will be difficult to match this quarter as American consumers decided to squirrel away the extra cash from cheaper fuel. The saving rate increased to 5.8 percent last month, the highest since December 2012, from 5.5 percent.
The report also showed that adjusting consumer spending for inflation, which generates the figures used to calculate gross domestic product, purchases declined 0.1 percent, the first drop since April, after a 0.2 percent increase in the previous month.