WASHINGTON (AFP) — US consumer spending showed the weakest growth in 15 months in December with Americans cautious about the economic picture, data showed Thursday.
A Commerce Department monthly survey showed a 0.2 percent rise in personal spending in what is normally a heavy holiday shopping period. Incomes meanwhile rose 0.5 percent.
Both figures were stronger than expected as most analysts had expected a 0.4 percent rise in income and a 0.1 percent gain in spending.
But analysts said the data reflected a slowing economy and caution related to a deep housing slump and financial market turmoil.
Nomura Securities economist David Resler said the accompanying downward revisions to both October and November spending suggest "the underlying trend in spending has downshifted considerably."
The report showed growing incomes and modest spending gains despite an economic slowdown driven by a deep housing slump that some analysts fear may turn into recession.
"Shoppers took a holiday from the malls in December," said Joel Naroff of Naroff Economic Advisers. "In other words, drop shopping not shop till you drop was the catch phrase."
Taking out inflation, "the details show real spending softer everywhere in December," said Ian Shepherdson of High Frequency Economics.
Over the full year 2007, incomes increased 6.2 percent and spending rose 5.5 percent.
An inflation gauge in the report showed consumer prices up a modest 0.2 percent, down from a 0.6 percent increase in November. Core prices, excluding food and energy costs, also increased 0.2 percent in the month.
Over the 12 months to December, prices were up 3.5 percent and core prices rose 2.2 percent.
Real disposable income, adjusted for inflation, rose 0.2 percent in December, after a decline of the same amount in November.
Copyright © 2010 AFP. All rights reserved. More »
