Investing.com – Personal spending in the United States slowed for the first time in more than two years in December, reflecting weak consumer spending at the end of 2018, while personal income also declined in January
The Commerce Department said its business, which accounts for more than two-thirds of US economic activity, fell by 0.5% last month, its first decline since September 2016.
Economists had forecast a drop of 0.2%.
The release of the data was delayed due to the government shutdown and comes after data that had already shown the lowest level of retail sales in nine years.
Although personal income data were for January, the first year readings for personal expenses and PCE remained late, with Friday readings corresponding to December.
The report also showed that it dropped by 0.1% in January, its first decline in almost three years. This is due to a 1% increase in December attributed by the Commerce Department to an increase in special payments, including a special dividend from VMWare and grants to farmers.
The preferred measure of inflation by the Federal Reserve, the, rose by 1.9% in December compared with the previous year, in line with expectations. The Fed generally fires for inflation close to 2%.
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