Jan. personal income up 0.3%, spending rises 0.2% (by Steve Goldstein)

WASHINGTON (MarketWatch) -- The Commerce Department said Thursday that personal income rose 0.3% in January after a 0.5% jump in December. Consumer spending edged up 0.2% after no movement at all in December. Economists polled by MarketWatch had expected 0.4% gains for both income and spending. Consumer spending, while worse than forecast, had some positive signs in January. Durable-good spending climbed 0.9% and nondurable good spending rose 0.4%. It was only services spending that was flat, and that may have been impacted by a lesser need to heat homes due to the fourth-warmest January on record. An inflation gauge the Federal Reserve closely tracks, the personal consumption expenditure price index, rose 0.2% in January after a 0.1% gain in December. Core PCE inflation, which strips out food and energy, rose 0.2%, matching economist expectations.

U.S. jobless claims little changed at 351,000 (by Jeffry Bartash)

WASHINGTON (MarketWatch) - The number of people who applied for U.S. unemployment benefits fell by 2,000 last week to a seasonally adjusted 351,000, the Labor Department said Thursday. Economists surveyed by MarketWatch estimated claims would total 350,000. Claims from two weeks ago were revised up to 353,000 from 351,000. The four-week average of claims, meanwhile, dropped 5,500 to 354,000, keeping it at a four-year low. The monthly average smoothes out seasonal quirks and provides a more accurate view of labor-market trends. Continuing claims, which reflect people already receiving benefits, decreased by 2,000 to a seasonally adjusted 3.40 million in the week ended Feb. 18. Continuing claims are reported with a one-week lag. About 7.50 million people received some kind of state or federal benefit in the week ended Feb. 11, up 11,933 from the prior week. Total claims are reported with a two-week lag and are not seasonally adjusted.

January construction spending slips 0.1% (by Steve Goldstein)

WASHINGTON (MarketWatch) -- Construction spending eased 0.1% in January to a seasonally adjusted annual rate of $827 billion, the first monthly dip since July, the Commerce Department said Thursday. Economists polled by MarketWatch had expected a 0.7% gain, and December's gain was revised to 1.4% from 1.5%. Private residential construction improved 1.8% in continuing some of the other positive trends seen from the housing market. However, private nonresidential construction slumped 1.5%, dragged lower by manufacturiing and power spending, and public construction eased 0.2% after a 5.5% decline in federal construction. Compared to January 2011, construction spending is up 7.1%, and the areas of weakness on a monthly level -- private manufacturing and power construction -- are up a blistering 38.5% and 28% year-over-year, respectively.

30-year mortgage rate falls to 3.90% (by Ruth Mantell)

WASHINGTON (MarketWatch) -- The average rate on the 30-year fixed-rate mortgage fell to 3.90% in the week ending March 1, remaining near a record low, Freddie Mac said Thursday in its weekly report on mortgage rates. The rate was 4.87% a year earlier. "Fixed mortgage rates bottomed out in January and February of this year which is helping spur the housing market," said Frank Nothaft, Freddie Mac's chief economist. To obtain the latest rate, payment of an average 0.8 point was required, according to Freddie, a buyer of residential mortgages. A point is 1% of the mortgage amount, charged in prepaid interest. The 15-year fixed-rate mortgage fell to 3.17% in the latest week from 3.19% in the prior week. Meanwhile, the average rate on the 5-year Treasury-indexed hybrid adjustable-rate mortgage rose to 2.83% from 2.80% in the prior week. The 1-year Treasury-indexed ARM ticked lower to 2.72% from 2.73%.

ISM manufacturing index falls to 52.4% in February (by Ruth Mantell)

WASHINGTON (MarketWatch) -- Business at U.S. manufacturers expanded at a slower pace in February, according to a key index released Thursday. The Institute for Supply Management said its manufacturing index declined to 52.4% last month from 54.1% in January. Economists polled by MarketWatch had expected a reading of 55% for February based on improving regional results and employment data. Readings over 50% indicate that manufacturers are generally expanding.