FXstreet.com (Barcelona) - Personal spending has posted a sharp decrease in December from November, while disposable personal income edged up on the month, and personal consumption expenditures rose at the same pace as during the previous month, according to the latest report by the Bureau of Economic Analysis.
Personal income rose 0.5% or $55.1 billion in December, while personal consumption rose at 0.2% pace ion the month, well below the 1.0% increase posted in November, downwardly revised from the 1.1% increase previously estimated.
The Decline on personal spending has been broad based reflected, according to Ian Shepherdson, Chief U.S. Economist at High Frequency Economics: The details show real spending softer everywhere in Dec, with durables - mostly autos - down 0.3%, non-durables down 0.2% and services up only 0.1%, well below the underlying trend. Clear evidence of the pressure on consumers' finances, and the chain store numbers for Jan say the situation has worsened. Expect 1-1/2% or less for Q1 real spending.
The prices index for personal consumption expenditures has risen 0.2% from November to December, excluding food and energy, the Core PCE also rose 0.2%. On the year, PCE prices index has risen 3.5%, the core PCE prices index has increased 2.2% from December 2006.