Washington, March 30 (Bloomberg) -- U.S. personal spending probably rose in Februaryat the slowest pace in three months, a sign the economy struggled at the start of theyear, analysts said in advance of a report set for release today. Personal spending probably rose 0.3 percent in February, less than half the 0.7 percentgain a month earlier, as slower business at retailers tempered a rise at auto dealers,according to the median of 52 forecasts in a Bloomberg News survey. Incomes probably rose 0.3 percent after increasing 0.6 percent in January, analysts said.The smaller gains in income and spending suggest the economy kept cooling in the firstquarter after growing in the prior three months at the slowest pace in 5 1/2 years. ``The risks facing the economy are still quite large,'' said Joseph Liro, chief economist atStone & McCarthy Research Associates in Princeton. The Commerce Department is scheduled to issue the report at 8:30 a.m. Washingtontime. The rise in spending would be the smallest since a similar increase in November.The expected rise in income would be the smallest since November's 0.2 percent gain. The economy slowed to a 1 percent annual growth rate during the last three months of2000, Commerce Department figures showed yesterday. Economic growth in the first quarter of this year was probably close to the same rate asthe last three months of 2000, St. Louis Federal Reserve Bank President William Poolesaid in Prague on Wednesday. Poole blamed the slowdown on a ``surprising drop indemand.''
Auto Sales
The expected gains in February spending are primarily due to ``vigorous auto sales,'' saidStephen Slifer, chief economist at Lehman Brothers Inc. in New York, in a report. Sales at auto dealers rose 0.2 percent in February after rising 1.3 percent a monthearlier, Commerce Department statistics showed earlier this month. Sales of cars andlight trucks rose to 17.5 million units at an annual pace in February, up from 17.2 millionin January, industry figures showed this month. That was the highest sales level sinceSeptember. Still, other retail sales were sluggish. Excluding automobiles, retail sales fell 0.3 percentlast month led by declines at furniture dealers and restaurants, Commerce statisticsshowed. Spending for the rest of the year will depend largely on whether the economyexpands enough to keep creating jobs, Liro said. ``If we see job losses in the next threeto four months, that would really cast a pall on consumption for the second half of theyear,'' he said. In February, businesses added 135,000 workers to their payrolls while the unemploymentrate was steady at 4.2 percent. That suggests ``continued moderation in incomegrowth,'' said David Greenlaw, an economist at Morgan Stanley Dean Witter in New York,in a forecast. A decline in the average workweek in February probably offset a 0.5percent increase in average hourly earnings.