Consumer spending picks up in December on faith that income growth is on the way
02/01/2011 3:17 pm EST
In the United States consumer spending, which makes up about 70% of U.S. economic activity in the U.S., rose more than forecast in December, according to data released by the Commerce Department on January 31.
Personal spending rose 0.7% in December. That was up from a 0.3% increase in November and above the 0.5% increase projected by economists surveyed by Bloomberg. Spending on goods rose 1.2% in the month and spending on services climbed by 0.4%. Personal income gained 0.4% in December after climbing 0.4% in November.
With spending outpacing gains in income, the personal savings rate fell to 5.3% in December from 5.5% in November. That’s the lowest rate of savings since March. Disposable income inched ahead by just 0.1% after subtracting inflation.
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