December saw a fall in consumer spending of 0.3%, suggesting that the US public is still cautious about overspending in spite of strong job creation and falling gas prices. Monday’s report from the Commerce Department outlined a minor decrease in personal spending for December compared to the month prior – the metric taking into account all standard personal expenses from grocery shopping to insurance premiums.
The fall was the first noted since January and represented a disappointing follow-on to November’s 0.5% gain in consumer spending. At the same time, personal income saw an uptick of 0.3% from November to December. America’s economy as a whole is heavily dependent on consumer spending, which accounts for almost three quarters of the country’s total economic activity.
On a more positive note, the closing quarter of the year brought about the highest increase in overall household spending in almost a decade. And while spending for December may not have been on-par with analyst expectations, the annual savings rate saw a 4.9% uptick. In total, a full 2.95 million jobs were added to the US market by employers during 2014, representing the best annual performance in around 15 years.
Wages, however, are progressing at a much slower rate having risen only 0.1% in December.