U.S. consumer spending slipped in December, as the pace of motor vehicle sales slowed and more Americans saved their money.
The Chicago Daily Herald reported that the Commerce Department said today (Feb. 2) that consumer spending fell 0.3% in December, compared to a 0.5% increase in November. Cheaper gasoline and fewer auto sales accounted for most of the decline.
Energy prices tumbled 5.2% in December for the sixth straight monthly decline. The falling oil and gas costs caused consumer spending — before adjusting for price changes — to record the largest monthly decrease since September 2009.
Personal income rose 0.3% in December, aided by the steady wave of hiring over the past year. But rather than spend those gains, consumers saved 4.9% of their disposable income, up from 4.3% in November.
Despite the decrease, several indicators show that Americans are growing more comfortable about the economy and are spending money again.
“Further big real income gains and soaring confidence point to serious strength in spending,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. “We would not be surprised to see gains approaching 5% annualized in the spring.”
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