WASHINGTON - Consumer spending rose last month more than forecast, a sign households are gaining confidence in the recovery and the job market.

Purchases rose 0.2 percent after little change the prior month, Commerce Department figures showed Monday. Incomes climbed 0.4, and the savings rate increased to the highest level in eight months.

Demand may accelerate as gains in payrolls, longer workweeks and rising pay give Americans the means to spend. Federal Reserve policy makers last week pledged to keep interest rates low to ensure that households weather the fallout from the European debt crisis, unemployment hovering near a 26-year high and tight credit.

"The U.S. consumer remains resilient," said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto, which correctly forecast the gain in spending. "As long as jobs are coming back, people will continue to spend." The median estimate of 61 economists surveyed by Bloomberg News called for a 0.1 percent gain in spending.

The savings rate increased to 4 percent last month, the highest level since September, to $454.3 billion. - Bloomberg News

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