U.S. consumer spending tepid; savings at two-year high

U.S. consumer spending barely rose in February as households used the windfall from lower gasoline prices to boost savings to the highest level in more than two years, the latest sign that the economy hit a soft patch in the first quarter. Economic growth has been undercut by bad winter weather, a strong dollar, a now-settled labor dispute at busy West Coast ports and softer demand in Europe and Asia. While the slowdown in activity is likely temporary, it could prompt the Federal Reserve to delay raising interest rates until later this year. "We expect spending activity to rebound meaningfully in the coming months as the weather setback dissipates, but the very weak tone in the data will likely continue to temper the impulse at the Fed to tightening policy in the near-term," said Millan Mulraine, deputy chief economist at TD Securities in New York.

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