US Dec personal spending up slightly, savings jump

WASHINGTON, Feb 1 (BestGrowthStock) – U.S. consumer spending rose
slightly less than expected in December as households opted to
save extra cash, lifting savings to a six-month high, a
government report showed on Monday.

The Commerce Department said spending rose 0.2 percent
after increasing by an upwardly revised 0.7 percent in
November. Consumer spending in November was previously reported
to have climbed 0.5 percent. It was the third straight monthly
gain in spending.

Analysts polled by Reuters had expected consumer spending,
which normally accounts for over two-thirds of U.S. economic
activity, to rise 0.3 percent last month.

For the whole of 2009, spending fell 0.4 percent, the
largest drop since 1938.

Boosting consumer spending is critical to putting the
economy on a sustainable recovery path, but a 10 percent
unemployment rate is pressuring households.

The economy grew at a 5.7 percent annual pace in the fourth
quarter, its fastest clip in six years, driven by a sharp
slowdown in the rate at which businesses reduced stocks of
unsold goods, the government said on Friday. Consumer spending
slowed to a rate of 2 percent after rising 2.8 percent in the
July-September period, the GDP report showed.

In December, spending adjusted for inflation edged up 0.1
percent after rising 0.4 percent the prior month. Personal
income increased 0.4 percent last month after increasing 0.5
percent in November, the Commerce Department said. That was a
touch above market expectations for a 0.3 percent increase. For
the whole of 2009, personal income dropped 1.4 percent, the
largest fall since 1938.

Real disposable income climbed 0.3 percent last month after
rising 0.3 percent in November. The rise in income saw savings
rising to an annual rate of $534.2 billion, the highest level
since June. The savings rate rose to 4.8 percent from 4.5
percent the prior month. For the whole of 2009, savings rose to
a record $502.7 billion.

Commerce Department data also showed the personal
consumption expenditures price index, excluding food and
energy, rising 1.5 percent from a year ago in December. The
index, which is a key inflation measure monitored by the U.S.
Federal Reserve, increased 1.4 percent in November.

Investing Research
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

US Dec personal spending up slightly, savings jump