WASHINGTON (AFP) — US consumer spending picked up in January, after six months of decline, while personal saving jumped as Americans hunkered down in a deepening recession, government data showed Monday.
The Commerce Department reported consumer spending rose a seasonally adjusted 0.6 percent in January, beating analysts' consensus forecast of a 0.4 percent gain.
In December, consumer spending fell 1.0 percent from the prior month. Over the June-December period the spending -- which accounts for two-thirds of US economic activity -- dropped 3.5 percent.
On an annual basis, consumer spending in January was 1.6 percent lower.
Personal income rose 0.4 percent in January, double the 0.2 percent gain in December but trailing the rise in spending.
In the first month of the year, Americans found more cash in their pockets as personal disposable income -- income after taxes are paid -- vaulted 1.7 percent.
The Commerce Department noted the income gains were largely due to pay raises for the federal government's civilian and military employees. Excluding special factors, personal income increased 0.2 percent in January, after falling 0.3 percent in December.
With the economy sinking rapidly in a second year of recession, Americans further shrugged off decades of intense credit-fuelled spending to save in the face of soaring unemployment, falling home values and rising foreclosures.
Personal saving -- disposable personal income less personal spending -- vaulted 5.0 percent in January, up from a 3.9 percent in December.
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