US consumer spending fizzles
INTERNATIONAL NEWS
IOL Business - Jan 31st, 08:29
US consumer spending was flat in December as households took advantage of the largest rise in income in nine months to boost their savings, setting the tone for a slowdown in demand early in 2012.
The Commerce Department said on Monday spending was the weakest since June and followed a 0.1 percent gain in November.
Economists polled by Reuters had expected spending, which accounts for more than two-thirds of US economic activity, to nudge up 0.1 percent last month. For all of 2011, spending rose 4.7 percent, the largest increase since 2007.
When adjusted for inflation, spending dipped 0.1 percent, breaking three straight months of gains. It increased 0.1 percent in November.
The government reported on Friday that consumer spending grew at a 2.0 percent annual pace in the fourth quarter, helping to lift gross domestic product 2.8 percent - an acceleration from the third-quarter's 1.8 percent rate.
Part of the spending, which has been concentrated in motor vehicles, has been funded from savings and credit cards as high unemployment constrains wage growth.
Wages rose last month, helping to prop-up incomes. Income advanced 0.5 percent, the largest gain since a matching increase in March, and followed a 0.1 percent rise in November. Economists had expected income to rise 0.4 percent.
Taking inflation into account, disposable income rose 0.3 percent after being flat the prior month. With disposable income outstripping spending, the saving rate rose to 4.0 percent from 3.5 percent in November.
Savings increased to annual rate of $460.1 billion, the highest since August, from $407.8 billion the prior month.
The report showed inflation pressures generally contained, with a price index for personal spending nudging up 0.1 percent after being flat the prior month. - Reuters
Related News
Solid first quarter for SABMiller's US ops
09/05/2012 - 08:13
It has been a solid first quarter for MillerCoors - the joint venture in the US between SABMiller and Molson Coors Brewing Company - driven by strong mix, positive pricing and unseasonably warm weather.
US grains drop
08/05/2012 - 08:01
US grain futures dropped on Monday as investors fled riskier assets, after Greek and French polls stoked doubts that struggling euro zone economies could continue to pursue austerity measures crucial to resolving the bloc's debt crisis.
Large manufacturers shift operations from China to US
24/04/2012 - 08:33
More than a third of US-based manufacturing companies with sales greater than $1bn are planning to bring back production to the United States from China
US retail sales may ease growth worries
17/04/2012 - 08:10
Washington - US retail sales rose solidly in March as Americans shrugged off high petrol prices and bought a range of goods, implying economic growth in the first quarter was probably not as weak as many had feared.
US: Walmart to Lower Grocery Prices by $1B
30/03/2012 - 09:15
Walmart Stores Inc. plans to lower its grocery prices by $1 billion this year in hopes that customers will be drawn in by the lower prices on food and also make purchases in other areas of the store, according to a published report. The retail giant generated $145 billion in grocery sales last year.
ZaPOP
