The Bureau of Economic Analysis said that personal spending accelerated at year’s end, rising 0.5 percent in December. This was its fastest monthly pace since September, boosted by strong growth in durable goods purchasing, which were up 1.4 percent in December. In contrast, nondurable goods spending was slightly higher but essentially flat. In general, Americans have been more willing to open their pocketbooks in recent months relative to a more-cautious approach seen earlier last year. Along those lines, personal consumption expenditures grew 4.5 percent year-over-year in December, up from 2.9 percent in March and its highest level in two years.
With the pickup in spending, the savings rate edged lower, down from 5.6 percent in November to 5.4 percent in December. This was the lowest rate since March 2014, and it was down from 6.1 percent one year ago. Therefore, the savings rate remained consistent with the narrative of better spending data as the year progressed. Read More