Consumer Spending Accelerates in December

Washington, DC, Jan. 31, 2011 -- Consumer spending increased in December, according to the Commerce Department.

Spending rose 0.7% in December, higher than the 0.3% increase registered the previous month, the Commerce Department estimated.

Income didn’t keep pace, however, rising 0.4% in December for the second consecutive month.

Economists had been looking for increases of 0.4% for incomes and 0.6% for spending.

With spending rising faster than incomes, the personal savings rate fell to 5.3% of disposable income from 5.5% in November. It was the lowest savings rate since last March.

Adjusted for inflation, personal consumption rose 0.3% last month.

Real spending on durable goods increased 0.7%, a reversal after having fallen 0.4% in November.