WASHINGTON ( TheStreet) -- Consumer spending edged higher in January amid continuing labor market woes and sluggish income growth.

A Commerce Department report released Monday showed spending grew 0.5%, or $52.4 billion, in January. The jump outpaced expectations calling for a 0.4% rise, according to consensus figures provided by Briefing.com. Spending in December was also revised higher to show a 0.3% incerase compared with the originally reported 0.2% lift.

Sweeping job losses over the last year have constrained spending and further economic growth. In his Capitol Hill testimony last week, Federal Reserve Chairman Ben Bernanke said consumer demand will be the key to a "sustained recovery," though a weak labor market will remain a headwind.

Employers shed 20,000 jobs from nonfarm payrolls in January, according to a Labor Department report, though the unemployment rate edged down to 9.7%. More striking, the number of long-term unemployed, or those out of work for more than 27 weeks, rose to 6.3 million. But the market will get an updated picture of the labor market on Friday when the government releases its most updated February jobs report.

The Commerce Department release also highlighted a 0.1% uptick in personal income in January, though that fell behind estimates for a 0.4% jump. Real disposable income dipped 0.6% during the month, while real spending jumped 0.3%.

Stocks traded higher just after the opening bell. The Dow Jones Industrial Average gained 51 points, or 0.5%, to 10,376, while the S&P 500 improved 6 points, or 0.5%, to 1110. A series of M&A headlines , including the sale of an American International Group ( AIG) unit to Britain's Prudential ( PUK), was helping the major averages in the morning.

--Written by Sung Moss in New York

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