Consumer spending south of the border rose solidly in December as demand for goods and services increased
Figures released Monday by the U.S. Commerce Department said on Monday consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased 0.4% last month after an upwardly revised 0.8% increase in November.
Economists had forecast consumer spending increasing 0.4% in December after a previously reported 0.6% rise in November. When adjusted for inflation, consumer spending rose 0.3% in December.
The figures were included in the advance fourth-quarter gross domestic product report published on Friday. Consumer spending accelerated at a 3.8% annualized rate in the October-December period, the fastest in three years, after rising at a 2.2% pace in the third quarter.
Robust consumer spending helped to offset the drag from trade and inventories on the economy, which grew at a 2.6% rate in the fourth quarter. GDP increased at a 3.2% pace in the third quarter.
Personal income rose 0.4% last month after advancing 0.3 percent in November. Wages increased 0.5% last month. Savings fell to $351.6 billion in December, the lowest level since December 2007, from $365.1 billion in the prior month.
