“Consumers are opening their wallets more freely and personal income is on the rise, confirming evidence that the economy is rebounding,” writes Will Pinkston in today’s The Wall Street Journal.

“The Commerce Department on Friday said consumer spending increased a brisk 0.6% in February, meeting analysts’ forecasts, following a similar gain in January. Personal income — or total earnings, including wages and salaries — also rose 0.6%, surpassing analysts’ expectations for the largest monthly gain since October 2000. The consensus forecast was for personal income to rise 0.3%.”

“The report capped a week of mostly positive economic news, marked by stability in new- and existing-home sales, surging consumer confidence, and indications of a possible recovery in one closely watched barometer: corporate profits.”

“‘This is starting to look like a self-sustaining economic expansion,’” said Steven Wood, chief economist for FinancialOxygen Inc., a Walnut Creek, Calif., provider of online financial services for banks.”

“Consumer spending on durable goods, those items intended to last three years or more, climbed 1.7%. Spending on nondurable goods, including food and clothing, rose 0.3%.”

“Economists are watching to see if consumers, whose spending accounts for two-thirds of the gross domestic product, can keep up the current pace. Job security remains a concern, as the number of U.S. workers filing first-time claims for unemployment benefits rose slightly last week. And economists are monitoring the manufacturing sector, which led the downturn with layoffs, to see if it can sustain a turnaround.”

“Another sign could come Monday, with the release of the March purchasing managers’ index by the Institute for Supply Management (formerly known as the National Association of Purchasing Management).”

“The February index indicated an expanding industrial sector for the first time in 19 months.”

“Income gains are partly tied to wage and employment growth as businesses seek to replenish depleted inventories. Many analysts expect inventory rebuilding to “taper off” later this year, said Paul Taylor, chief economist for the National Automobile Dealers Association.”

“Rising gasoline prices also are expected to erode household purchasing power.”

“And the boost from last year’s tax refunds finally is “petering out,” noted Wachovia Securities Inc. economist Mark Vitner.”

“At the same time, a rash of mortgage refinancings that allowed many homeowners to convert equity into cash for expenditures is slowing down as mortgage rates creep upward again.”

“Added Mr. Vitner: Those factors provided the economy with “‘a powerful boost when it needed it the most.’”