US December consumer spending up 0.7 pct, largest increase since July

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Consumer spending rose at the fastest pace in five months while personal income rose at a slightly slower pace in December, the Commerce Department said today.

The department said that spending rose by 0.7 pct in December after rising 0.5 pct in November. December s increase is the fastest rise since July, when spending also rose 0.7 pct.

Incomes rose 0.5 pct in December after rising 0.3 pct in the prior month. Both spending and income were in line with expectations.

For the year, income has risen 6.4 pct while spending has risen 6.0 pct.
Adjusted for inflation, real spending rose 0.3 pct in December after rising 0.5 pct in each of the prior two months. Real disposable incomes, which are inflation-adjusted and measure income after taxes, rose 0.2 pct in December after rising 0.3 pct in November.

Inflation as measured by the personal consumption expenditures price index rose 0.4 pct in December after remaining essentially flat in November. In the past year, the PCE price index has risen 2.3 pct, the fastest rise of any 12 month period since August.

Core inflation, which excludes food and energy, rose 0.1 pct in the month after remaining essentially flat in November. Core inflation has risen 2.2 pct in the past 12 months, matching the 12 month rise leading up to November.

kwy

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