US Personal Income Increased 10% In January, Consumer Spending Up 2.4% - Commerce Dept.

US personal income grew by 10 percent in January while consumer spending increased 2.4 percent during the same month, the Commerce Department's Bureau of Economic Analysis said in a statement on Friday

WASHINGTON (UrduPoint News / Sputnik - 26th February, 2021) US personal income grew by 10 percent in January while consumer spending increased 2.4 percent during the same month, the Commerce Department's Bureau of Economic Analysis said in a statement on Friday.

"Personal income increased $1,954.7 billion (10.0 percent) in January," the statement said. "Personal consumption expenditures increased $340.9 billion (2.4 percent)."

Both numbers are key indicators of the economy's health, especially consumer spending, which accounts for 70 percent of GDP.

On Thursday, the Commerce Department said GDP growth for the fourth quarter of 2020 showed a slightly higher reading of 4.1 percent on its second reading. The first reading, conducted on January 28, showed a growth of 4 percent.

Americans' disposal income and spending improved in January after personal checks for $600 were sent out to most individuals by the former Trump administration under a $900 billion COVID-19 relief package approved by Congress.

Aside from those checks, people rendered jobless by the novel coronavirus pandemic also received their regular $300-a-week compensation from the government in January.

The Commerce Department said the additional money helped boost the overall spending of Americans.

"The estimate for January personal income and outlays was impacted by the continued federal response to the spread of COVID-19," the statement released on Friday said.

Americans who managed to hold on to their jobs and income through the pandemic, especially those in higher-earning households, have also been spending more on consumer goods and services after enduring strict coronavirus-related restrictions on travel, outdoor dining and other activities.

The United States lost more than 21 million jobs between March and April at the height of economic lockdowns and other restrictive coronavirus-related measures. Since, almost every month except in December, the United States has experienced jobs growth, including in January when 49,000 jobs were created. Federal Reserve Chairman Jay Powell said recently the real unemployment rate remained closer to 10 percent as compared to the low of 3.5 percent in February 2020 before the onset of the pandemic.