U.S. workers are making steady gains in wages, but they’re being very frugal with that extra income, said David Rosenberg, chief strategist at Gluskin Sheff & Associates Inc. The reluctance among consumers to spend their bigger paychecks is acting as a drag on the economy.

Nominal dollar household earnings rose 0.4 percent in February from the prior month with the annual trend running at 4.5 percent year over year. That’s a healthy pace that isn’t showing up in consumer spending, Rosenberg said.

“The problem is more on the spending side as nominal expenditures were stagnant in February and in real terms fell 0.1 percent for the first time since last April,” he said in a March 31 report obtained by Newsmax Finance. “Despite the pickup in job creation, households are not willing to make a commitment to the economy.”

While purchases of big-ticket durable goods have fallen for three months in a row, spending on services including health care, hotels, cable TV, telecommunications and air travel has grown. Gasoline expenditures rose 1.3 percent in February from the prior month as oil prices rebounded.

“Consumer services, for the most part, are bucking the soft consumer spending,” Rosenberg said. “Putting money back into the tank and leasing more gas guzzlers is definitely the American way.”

People are showing a greater tendency to pocket their extra income, with personal savings growing to an annualized $769 billion in February from $729 billion in January, $642 billion in December and $582 billion in November.

The increased savings rate may be the result of households’ trying to rebuild wealth that was lost after the housing bubble began to deflate in 2006, Rosenberg said. The collapse in property values led to a major financial crisis and the deepest economic slowdown since the Great Depression.

“Keep in mind that real estate prices are still 16 percent below their pre-recession peak and actually lower today than they were in November 2004,” Rosenberg said.

Household income for middle-class workers will rise in the next few years as the job market improves enough to spur wage growth, according to Goldman Sachs Group Inc.

The bank said pay gains will help to partly reverse a 40-year trend of paltry growth in inflation-adjusted household income and encourage consumers to spend more.

“In 2014-2015, real median household income seems to be on track for annualized growth of around 3 percent, which would be the fastest pace over a comparable period since the late 1990s,” Jan Hatzius, chief economist at Goldman, said in a March 27 report obtained by Newsmax Finance. “Real consumer spending will grow at an average rate of around 3 percent over this period as well.”

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