U.S. consumer spending drops 0.5% in December
The numbers: Amid the biggest stock-market plunge in decades, Americans reduced spending in December by the largest amount since the economy exited recession in 2009.
The latest report, long delayed by the partial government shutdown, includes income figures for both January and December but just the spending figures for December.The 12-month rate of inflation slowed to 1.7% in December from 1.8%, as measured by Federal Reserve’s preferred PCE gauge. The core rate that excludes food and energy was flat at 1.9%.
The December report also contains some quirks that raise questions about how accurately it reflects the economy at year end. Other reports such as fourth-quarter GDP suggest U.S. growth didn’t slow quite as dramatically as the spending figures suggest. Big picture: The U.S. economy clearly slowed toward the end of 2018, but unlike consumer spending in December, it did not fall off a cliff.
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