FILE- In this March 14, 2019, file photo a woman shops at Neiman Marcus during the opening night of The Shops & Restaurants at Hudson Yards in New York. On Friday, March 29, the Commerce Department issues its January report on consumer spending, which accounts for roughly 70 percent of U.S. economic activity. (AP Photo/Mark Lennihan, File)

WASHINGTON (AP) — U.S. consumer spending edged up a tiny 0.1 percent in January, while incomes advanced a modest 0.2 percent in February, further evidence that economic activity may have decelerated after strong growth for most of last year.

The Commerce Department said Friday that the weak gain in consumer spending followed a 0.6 percent plunge in December that marked the biggest one-month drop in more than nine years. The 0.2 percent rise in incomes in February came after a 0.1 percent drop in incomes in January.

Many analysts believe the economy has entered a soft patch and that growth is significantly slower in the current quarter. The U.S. faces various headwinds, including weakness overseas and the waning effects of the 2017 tax cuts.

The government on Thursday revised down gross domestic product growth to 2.2 percent in the fourth quarter. Consumer spending, which accounts for 70 percent of economic activity, is a major reason for the slowdown.

Economists at Macroeconomic Advisers said they were trimming their GDP tracking forecast for the first quarter to 1.2 percent based on the weaker-than-expected spending report. Other analysts believe first quarter growth will come in between 1 percent and 1.5 percent.

President Donald Trump, who is counting on a strong economy to support his re-election bid, has disputed talk of a slowdown. In an appearance in Michigan Thursday night, he told the audience, “The economy is roaring.”

The spending report showed that purchases of durable goods such as autos fell 1.2 percent in January after an even bigger 2.9 percent plunge in December. Purchases of nondurable goods such as clothing edged up 0.3 percent following a 2.2 percent fall in December.

A key inflation gauge watched closely followed by the Federal Reserve edged down 0.1 percent in January and is up just 1.4 percent over the past 12 months, the smallest 12-month gain since the period ending in September 2016.

In response to the signs of a slowdown and rising economic risks, the Fed has done an about-face this year and announced that it expects to leave its key interest rate unchanged for the whole year following four rate hikes in 2018.

The spending and income report showed that the saving rate slipped to 7.5 percent in January, down from 7.7 percent in December.

US new-home sales increased 4.9 percent in February

WASHINGTON (AP) — Sales of new U.S. homes climbed 4.9 percent in February, an indication that falling mortgage rates have given a boost to demand from buyers.

The Commerce Department said Friday that new homes sold at a seasonally adjusted annual rate of 667,000 in February, an increase from an upwardly revised 636,000 in January. New-home sales are running 2.8 percent higher through the first two months of 2019 than during the same period last year.

This initial rebound in sales after a weak end to 2018 bodes well for the traditional Spring homebuying season that began this month. Recent gains suggest that the combination of a solid job market and rising wages has encouraged more people to purchase both new and existing homes, especially as lower mortgage rates have made their money go further.

“This trend supports the fact that lower mortgage rates have started to entice buyers this Spring and foreshadows a potential strengthening of existing-home sales in the months to come,” said Danielle Hale, chief economist at Realtor.com.

A sharp drop in mortgage rates has eased affordability pressures and aided homebuying. The average 30-year mortgage rate climbed for much of 2018 to roughly 5 percent in November, only to dip to nearly 4 percent this week, according mortgage buyer Freddie Mac.

The median sales price of a new home in February fell 3.6 percent to $315,300.

New-home sales jumped in the Northeast and Midwest in February by more than 20 percent, while posting a more tepid gain of 1.8 percent in the South. Accounting for about 60 percent of new-home sales, the South is the largest U.S. housing market.

Sales were unchanged in the West.

The housing market has also shifted slightly to new construction for entry-level buyers. The proportion of properties sold between the prices of $200,000 and $299,999 was 35 percent in February, up from 31 percent in 2018. This move has corresponded with a downward shift in sales of homes priced above $500,000.