US Economy: Consumer Spending Stalls, but Savings Up

Posted January 30th, 2012 at 1:35 pm (UTC-5)
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The U.S. government says incomes for American workers increased in December, allowing them to put more money in their savings accounts even as their consumer spending stalled.

In the U.S., consumer spending accounts for 70 percent of the national economy. But the government said Monday that it was little changed in December, even during the height of the holiday shopping season. Consumer spending had increased one-tenth of one percent in November.

Personal income grew by one-half of a percentage point in December, the most in nearly a year. The government said workers, many of whom have had to use savings to pay their bills in recent years, boosted their savings rate to 4 percent last month, up a half percentage point over November.

The country's economy, the world's largest, has been growing at a sluggish pace, up just 1.7 percent in 2011. But it grew at a faster pace — 2.8 percent — in the October-to-December period last year. Officials at the country's central bank, the Federal Reserve, last week predicted growth of up to 2.7 percent for 2012.