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March 02, 2015

U.S. consumer spending falls

Income and savings rise slightly, Commerce Department reports

U.S. consumer spending fell for a second straight month in January, likely as lower gasoline prices continued to weigh on receipts at service stations.
The Commerce Department said on Monday consumer spending slipped 0.2 percent after falling 0.3 percent in December.
Economists polled by Reuters had forecast consumer spending, which accounts for more than two-thirds of U.S. economic activity, dipping 0.1 percent in January.
When adjusted for inflation, consumer spending increased 0.3 percent after December's 0.1 percent dip. 
Income increased 0.3 percent after a similar rise in December. Income at the disposal of households after accounting for inflation advanced 0.9 percent, the largest increase since December 2012. The saving rate increased to 5.5 percent, the highest since December 2012.
Lower gasoline prices continued to put downward pressure on inflation, with key consumer price gauges slipping further below the Federal Reserve's 2 percent target. 
A price index for consumer spending braked to show a 0.2 percent rise in the 12 months through January, the weakest reading since October 2009. The personal consumption expenditures (PCE) price index had increased 0.8 percent in December.
Excluding food and energy, the so-called core PCE price index increased 1.3 percent in the 12 months through January.