Workers got bigger paychecks in January, but they were less inclined to spend them amid nervousness about the future of the economy. 

Personal income increased 0.9% in January, its biggest jump in a year, the Bureau of Economic Analysis said Friday. Meanwhile, personal spending decreased 0.2%, its biggest drop since February 2021. The income jump blew past the expectations of forecasters who had expected it to rise 0.4%, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal. The spending drop likewise came as a surprise, bucking the median forecast for a 0.1% increase.

Should Americans' newfound reluctance to shop prove a lasting trend, it would spell trouble for the economy because consumer spending is the main engine of U.S. economic growth, accounting for more than two-thirds of the gross domestic product.

The plunge may partly be explained by a drop in auto sales that surged in December, the impact of unusually cold weather, and the Los Angeles wildfire𒊎s—all which discouraged spending, Sal Guatieri, senior economi✃st at BMO Capital Markets, said in a commentary.

Consumers may also be nervous about the potential impact of tariffs President Donald Trump has promised to impose, which could push up prices, economists at Wells Fargo Securities said in a commentary. Recent surveys have indicated consumers are 澳洲幸运5官方开奖结果体彩网:growing more worried about the impact of the tariffs on their household budgets.

Other longer-term factors dragging down spending are continued high interest rates on loans and the impact of pandemic-era price increases still hurting household budgets.

Still, the uptick in income, which was driven by increasing wages as well as the yearly Social Security Cost-of-Living adjustment, bodes well for future spending. That extra cash may be burning holes in pockets, especially in better-off households.

"Spending tends to follow income," Robert Frick, corporat𒀰e economist with Navy Federal Credit Union, said in a commentary. "If people have money, they usually spend it,"