US consumer spending and incomes rose in January as a decline in consumer prices picked up speed.

US Commerce Department data released Monday showed consumer spending, which drives about 70 per cent of the economy’s activity, rose 0.3 per cent in January, rebounding from a slight 0.1 per cent dip in December, according to data adjusted for price changes.

Without the price adjustments, spending fell 0.2 per cent.

Personal income rose 0.3 per cent for the second month in a row. However in January, wages and salaries, the lion’s share of income, jumped 0.6 per cent after a 0.1 per cent rise the prior month.

Americans socked away more money in January as disposable personal incomes grew. The personal saving rate, a percentage of disposable personal income, rose a half percentage point to 5.5 per cent.

“The American consumer is starting the year off on a fairly positive note,” said Jennifer Lee, senior economist at BMO Capital Markets.

Lee said stronger job growth, which boosted wages and salaries and, thus, personal incomes, “gave consumers more support for some saving, and some spending.”

Inflation continued to weaken amid declines in food and, most of all, energy prices, down 10.4 per cent as crude oil prices fell.

The personal consumption expenditures price index slid 0.5 per cent in January, accelerating from a 0.2 per cent drop in December.

Excluding food and energy, core PCE prices, the Federal Reserve’s preferred inflation measure, edged up 0.1 per cent in January after a nearly flat increase in the prior month and was up 1.3 per cent year-over-year.

The Fed’s longer-term inflation target is 2.0 per cent.