Us personal incomes surged in January as another round of bailout cheques for the epidemic also contributed to the biggest increase in personal spending in seven months.

Personal income rose 10% in January, exceeding economists' expectations and the biggest increase in nine months, according to data released by the commerce department on Friday. Personal spending rose 2.4% for the month, and the December figure was revised down to 0.4%.

At a time when the pandemic disrupts the economy and suppresses demand, surging incomes and expectations of more government stimulus are expected to add extra impetus to consumption.

The increase in personal income in January reflected the impact of the $900 billion pandemic rescue package passed in December. The bill gives millions of Americans access to bailout checks directly distributed by the government, in addition to an additional $300 a week in unemployment benefits. While some people have turned cash handed out by the government into bank deposits, the strong growth in spending suggests that others are spending.

The U.S. Congress is pushing ahead with President Joe Biden's $1.9 trillion aid package, which is likely to boost revenue. Another round of bailout checks, along with a child tax credit and an increase in weekly unemployment benefits, will boost disposable income in the coming months.

The personal savings rate rose to 20.5 per cent in January, the highest since May last year.

Inflation indicators have been weak throughout the pandemic, but price pressures are gradually increasing in some areas of the economy. The price index of personal consumption expenditure rose 1.5% in January compared with the same period last year. This is the biggest increase in nearly a year.

The core PCE price index, which excludes food and energy, also rose 1.5%, the biggest increase in four months.