Consumer spending in the U.S. rose in February for a fifth consecutive month, a rebound that will require gains in employment to be sustained.

The 0.3 percent increase in purchases matched the median forecast of economists surveyed by Bloomberg News and followed a 0.4 percent advance in January, Commerce Department figures
showed today in Washington. Incomes were unchanged, falling
short of expectations as winter storms hurt hiring and hours
worked.

Best Buy Co. and Nike Inc., which have reported higher- than-anticipated profits, are among companies that may keep benefitting as the emerging recovery gives Americans the
confidence to buy. The pickup in purchases has caused the
household savings rate to drop to the lowest level in more than
a year, underscoring the need for more jobs to ensure the
recovery is maintained.

“Considering the circumstances, this is a fine performance with the job market still not strong,” said Michael Moran, chief economist at Daiwa Securities America Inc. in New York.
“As the labor market comes back, we should see continued
support from consumers.”

Stocks and commodities rose on signs the world’s largest economy will keep growing and as concern waned over the Greek government’s deficit. The Standard & Poor’s 500 Index advanced
0.6 percent to 1,173.22 at 4:10 p.m. in New York.

Median Forecast

The median estimate of 70 economists surveyed called for a 0.3 percent increase in spending, after an originally reported gain of 0.5 percent the prior month. Projections ranged from no
change to a 0.6 percent advance.

The little change in incomes followed a 0.3 percent increase in January. The median estimate of economists surveyed called for a 0.1 percent advance. Wages and salaries were also
little changed last month after climbing 0.4 percent in January.

Payrolls fell by 36,000 workers in February and the workweek shrank as blizzards in the eastern part of the country caused some plants to temporarily close. The median forecast of
economists surveyed anticipate the government’s employment
report on April 2 will show the economy created about 180,000
jobs this month, the most in three years.

Because spending rose and incomes were unchanged, the savings rate fell to 3.1 percent last month, the lowest level since October 2008.

‘Step Two’

“Step one in lifting consumer spending was the lowering of the personal saving rate,” Ken Mayland, president of ClearView Economics LLC in Pepper Pike, Ohio, said in a note to clients.
“That’s pretty much played out. Now for step two, we need to
see a good, old-fashion advance of employee compensation.
Hopefully, we will begin to see that in March with the rise in
payrolls.”

Nike, the world’s largest maker of athletic shoes, said this month that third-quarter profit more than doubled, beating analysts’ estimates, as North America posted a sales increase
for the first time in a year.

Best Buy, the largest U.S. electronics retailer, last week reported fourth-quarter profit that exceeded analysts’ estimates as the Richfield, Minnesota-based company boosted sales by
cutting prices on flat-panel TVs and offering discounts during
the holidays.

Adjusted for inflation, spending also climbed 0.3 percent, the best performance since November. Price-adjusted spending on durable goods, such as autos, furniture, and other long-lasting
items, fell 0.2 percent in February.

Spending Breakdown

Purchases of non-durable goods increased 0.9 percent, the biggest gain since January 2009, as Americans stocked up on groceries and splurged on clothing. Spending on services, which
account for almost 60 percent of all outlays, increased 0.3
percent.

Auto dealers are among retailers that may see a pickup in demand this month, said industry analysts such as J.D. Power & Associates and Edmunds.com. Cars and light trucks will sell at a
12 million unit annual pace in March, up from a 10.4 million
pace in February, according to a Bloomberg survey.

The economy grew at a 5.6 percent annual rate in the fourth quarter, the fastest pace in six years, figures from the Commerce Department showed last week. Consumer spending slowed
to a 1.6 percent pace from 2.8 percent the previous three
months.

Spending Accelerates

Household purchases, which account for 70 percent of the economy, are on track to expand at a 3.4 percent pace this quarter, the best performance in three years, according to a
forecast issued after the government’s report by economists at
Morgan Stanley in New York.

Today’s figures also showed prices cooled. The inflation gauge tied to spending patterns rose 1.8 percent from February 2009, down from a 2.1 percent increase in the 12 months ended in
January.

The Fed’s preferred price measure, which excludes food and fuel, was unchanged in February for a second month and was up 1.3 percent from a year earlier.

“The risks are that inflation may continue to decelerate,” John Herrmann, senior fixed-income strategist at State Street Global Markets LLC in Boston, said in a note to
clients, supporting the view that Federal Reserve policy makers
will hold interest rates low for a long time.