WASHINGTON (3/3/15)--Consumer spending nationwide fell 0.2% in January after a 0.3% drop in December, according to numbers released Monday by the Bureau of Economic Analysis. The silver lining, perhaps, is that the saving rate climbed to 5.5%, doubling down on December's 0.5% rise (Economy.com March 2).
While overall spending declined, real spending jumped 0.3% after a 0.1% step back in December thanks to upswings in service, utility and goods spending.
"Real spending growth accelerated in January as utility spending rebounded and consumers continued to benefit from low energy prices," said Scott Hoyt, Moody's analyst (Economy.com). "Discounting the weather effect, spending grew, though only modestly. Despite the weakness, however, the trend is positive."
Personal income growth remained steady with a 0.3% increase, while wage income growth accelerated to 0.5%.
Consumer prices fell 0.5%, which is the biggest drop since November 2008 and the fourth-largest decline on record, according to Moody's.
Energy prices fell 10.4%, and food prices dropped 0.2%. Excluding energy and food, core prices climbed 0.1%.
"Despite their recent increases, consumers are spending less on gasoline and other energy goods than they were a year earlier, freeing cash for other purposes," Hoyt said. "This is a drag on nominal spending growth, however."