Consumer spending, the driver of about two-thirds of the US economy
Washington - AFP
Americans had a bit more income in their pockets in December but kept a clamp on spending in the year-end holiday season, while inflation was flat, government data showed Monday.
Consumer spending, the driver of about two-thirds of the US economy, edged down less than 0.1 percent last month, following a 0.5 percent rise in November, the Commerce Department said.
Personal income rose 0.3 percent for the second straight month, even while growth in wages and salaries, the largest part of income, slowed sharply to a 0.2 percent increase from 0.5 percent in November.
Post-tax, or disposable, personal income, picked up slightly to a 0.3 percent gain.
Americans socked away more of their income, pushing the personal saving rate back up to 5.5 percent, the three-year high reached in October.
"The strength in income, combined with generally encouraging confidence data, points to re-acceleration in spending in early 2016," said Jim O'Sullivan, chief US economist at High Frequency Economics.
Inflation remained muted and well below the Federal Reserve's 2.0 percent target amid falling oil prices and a slowing US economy.
The personal consumption expenditures price index, the Fed's preferred inflation measure, slipped 0.1 percent in December. The core PCE price index, which strips out food and energy prices, increased less than 0.1 percent.
Compared with a year ago, consumer prices rose 0.6 percent and the core PCE price index was up 1.4 percent.
Though personal income increased 4.5 percent in 2015, a tenth point higher than in the previous year, consumer spending slowed to an increase of 3.4 percent from 4.2 percent in 2014.