There were two positive signposts for the economy that came out yesterday. First of all, consumer spending increased by 0.4 percent in January, a significant increase over December's figure of 0.1 percent. Households spending on services, apart from goods, increased by 0.8 percent - its biggest monthly rise since 1998. The Commerce Department also reported that incomes rose by 0.3 percent on the month.
Meanwhile, on the other side of the economy, manufacturing also rose sharply in the latest figures. February's manufacturing index, published by the Institute for Supply Management, rose to 53.2 in February, from 51.3 in January; anything over 50 is supposed to signal an expansion.
That's solid growth on both the supply and demand sides of the economy, and an excellent sign for the recovery. We will see another important number on Friday, when the February unemployment figures are released.
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