January Consumer Spending Surges, Saving Dips

Published on:
12 September 2006 at 10:20 a.m. ET

Written by: Unknown Author –

http://www.insidearm.com/news/00007245-january-consumer-spending-surges-saving-d/

By Andrea Hopkins, Reuters

U.S. consumer spending surged 0.9 percent in January, just below market expectations, as shoppers spent all their income and dipped into savings despite a pickup in inflation, a government report showed on Wednesday.

The Commerce Department said personal income grew 0.7 percent in January, the biggest gain since September and above Wall Street forecasts for a 0.6 percent rise.

But consumers spent even faster, notching the largest spending increase since July and producing a -0.7 percent saving rate. It was the third straight month in which Americans have tapped savings to finance their spending. The personal saving rate — the proportion of money Americans sock away — has not been above zero since March 2005.

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