The advance of 0.5% followed a December gain of 0.1%, showed a report released on Friday by the Commerce Department. The figure for January exceeded the average forecast of a 0.3% gain by analysts. Incomes climbed by 0.5% as well, which was more than what was projected.
Inexpensive gasoline, steady hiring along with rising values in home are powering the ability of Americans to increase spending, which is nearly 70% of the U.S. economy.
The report showed as well that the preferred measure of inflation for the Federal Reserve rose by its most since October of 2014, which illustrates the challenge central bankers in the U.S. have as they consider tightening the monetary policy amidst feeble markets across the globe.
Growth in income is solid, said one economist, therefore it is expected that consumer spending would pick up during the current quarter.
The worry, he added, was the consumers were slowing spending down at a pace that was more pronounced than expected. However, the latest numbers show the consumer does not seem to be slowing down like previously thought.
Another report from the Department of Commerce, issued on Friday as well, showed that the gross domestic product had expanded at a revised annualized rate of 1% during the 2015 fourth quarter, faster than reported earlier of an increase of 0.7%.
Projections for consumer spending for January ranged between a drop of 0.1% and an increase of 0.5%. The reading for the previous month was reported initially as being unchanged.
Disposable income, which is the money left after taxes, rose by 0.4% for a second consecutive month, after being adjusted for inflation.
The saving rate stayed the same at 5.1%, while salaries and wages advance by 0.6% following an increase of 0.2%.
Services spending during last month reflected an increase in utility uses due to the return of the colder temperatures during January following a December that was unseasonably warm.
A storm also hit the Northeast and Mid Atlantic regions with snow late in January.
Spending for durable goods, which include autos, increased by 1.1% after being adjusted for inflation, while the outlays for the month for non-durable goods, which gasoline is part of rose 0.4%.