Consumers Take a Nap

The economy is looking fairly sleepy these days. Consumer spending edged up just 0.1 percent in February, on the heels of a downwardly revised 0.1 percent gain in January, the Commerce Department said yesterday. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, was previously reported to have increased 0.5 percent in January.

Inflation, though small, has an effect on these numbers. When adjusted for inflation, consumer spending rose 0.2 percent in February, and inflation-adjusted consumer spending for January was revised down to show it unchanged rather than the 0.4 percent rise that was previously reported.

In the wake of the weak consumer spending and a similar slowdown in trade data, economists have dropped their first-quarter gross domestic product growth estimates to as low as 0.9 percent. The economy grew at a 1.4 percent pace in the fourth quarter of 2015.