WASHINGTON, Jan 31 (Reuters) – U.S. consumer spending rose
more than expected in December to post the sixth straight
month of gains as households drew down on their savings to fund
purchases, government data showed on Monday.
The Commerce Department said spending increased 0.7 percent
after rising by 0.3 percent in November.
Economists polled by Reuters had expected spending, which
accounts for about 70 percent of U.S. economic activity, to
increase 0.5 percent last month.
The spending figures were included in the government’s
fourth-quarter gross domestic product (GDP) report released on
Friday, which showed the economy grew at a 3.2 percent pace on
the back of robust consumer spending.
Spending in the fourth quarter grew at a brisk 4.4 percent
pace, the fastest in more than four years. While economists see
spending remaining strong this year, they expect the pace of
growth to be less brisk than in the last three months of
Spending in December came as incomes increased 0.4 percent
and savings dropped to their lowest level since March. Incomes
grew 0.4 percent in November and the increase last month was in
line with economists’ expectations. Savings fell to $614.1
billion from $634.4 billion in November.
The report also showed the Federal Reserve’s preferred
measure of consumer inflation — the personal consumption
expenditures price index, excluding food and energy — was
unchanged in December after edging up 0.1 percent in November.
In the 12 months through December, the core PCE index rose
0.7 percent, the smallest increase since records began in 1959,
after increasing 0.8 percent in November.
(Reporting by Lucia Mutikani, Editing by Andrea Ricci)