The Bureau of Economic Analysis said that personal spending slowed in January after the strong gains in December. Personal consumption expenditures rose 0.2 percent in January, off from the more robust pace of 0.5 percent in December. In this latest report, weaker durable goods sales (down 0.3 percent), including motor vehicles, held back spending, whereas nondurable goods spending increased (up 1.0 percent). In general, Americans have been more willing to open their pocketbooks in recent months relative to a more cautious approach at this time last year. Along those lines, personal spending grew 4.7 percent year-over-year in January, its highest level since November 2014.
With the easing in spending, the savings rate edged higher, up from 5.4 percent in December to 5.5 percent in January. To illustrate the increased willingness to spend relative to one year ago, the savings rate was 6.2 percent in January 2016. Read More