WASHINGTON -- Americans boosted their spending in January at the fastest pace in eight months, while their incomes increased by the largest amount since June. Both are signs that the economy got off to a good start in the new year.
The Commerce Department says consumer spending rose 0.5 percent last month, while incomes also grew 0.5 percent in January.
Consumer spending accounts for two-thirds of economic activity, and the solid showing are likely to bolster expectations that consumers will bolster overall economic growth this quarter.
A key price gauge increased 1.3 percent in January compared to 12 months ago, nearly double the 0.7 percent gain seen in December. The Federal Reserve has said an acceleration of inflation will be a key factor determining the pace of future interest rate hikes.