WASHINGTON – U.S. consumer spending rose 0.7 percent in December, outpacing November’s increase of 0.5 percent, the U.S. Commerce Department’s Bureau of Economic Analysis today reported.
After-tax disposable income was up 0.5 percent, outpacing November’s gain of 0.2 percent, the bureau said. But with spending outpacing income, the national savings rate dove further into the negative – from November’s minus 1 percent to December’s minus 1.2 percent – as the average consumer outspent earnings by an even greater margin.
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Inflation-adjusted spending on durable goods – autos, furniture and other long-lasting items – rose 1.2 percent in December, after rising 1.3 percent the month before, said Bloomberg News. Spending on non-durable goods rose 0.6 percent, slowing from the previous month’s 1 percent gains. Spending on services was unchanged.
For the final quarter of 2006, spending rose at an annual rate of 4.4 percent, the bureau said. The increase was the biggest since the first quarter of 2006, Bloomberg noted, and outpaced the third quarter’s annual rate of 2.8 percent.
Additional information, including the full report on December 2006 personal income and outlays, is available from the Commerce Department’s Bureau of Economic Analysis at www.bea.gov.
