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Post by bot on Feb 1, 2014 7:14:15 GMT -5
Consumer spending climbs 0.4% in December WASHINGTON (MarketWatch) - Consumer spending rose sharply in December for the second month in a row, but Americans had to dip into their savings to pay for their purchases. Spending rose a seasonally adjusted 0.4% last month following an upwardly revised 0.6% gain in November, the Commerce Department said Friday. It was the strongest back-to-back increase since the first two months of 2012, though October's 0.4% bump was revised down to 0.1%. Americans spent more on services such as dining out, but they bought fewer long-lasting durable goods like cars and appliances. The incomes of Americans, however, were unchanged in December and they fell 0.2% after adjusting for taxes and inflation. The U.S. savings rate dropped to 3.9% from 4.3%, putting it at the second lowest rate since 2009. Economists polled by MarketWatch had forecast a 0.2% gain in spending and a 0.1% rise in income. Meanwhile, inflation as gauged by the PCE price index advanced 0.2% in December, or 0.1% excluding food and energy. In the past 12 months the PCE index has risen a tame 1.1% overall and 1.2% on a core basis.
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