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Consumer spending plummets, personal income rises in December

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Consumer spending plummets, personal income rises in December

Consumers using lower gas prices to pay down debt, boost savings.

The Department of Commerce today reported that personal income in the US increased $41.3 billion, or 0.3%, and disposable personal income (DPI) increased $35.8 billion, or 0.3%, in December.

Personal consumption expenditures (PCE) decreased $40.0 billion, or 0.2%, it largest drop since 2009. In November, personal income increased $47.2 billion, or 0.3%, DPI increased $34.2 billion, or 0.3%, and PCE increased $58.8 billion, or 0.5%, based on revised estimates.

Economists had expected consumer spending (PCE) to decrease 0.2% in December. 

Americans used their increase in disposable income largely to increase savings, with personal savings rising to $643.2 billion in December, compared with $568.2

billion in November. The personal saving rate -- personal saving as a percentage of disposable personal income -- was 4.9% in December, compared with 4.3% in November.

The full report can be found here.

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