Bigger rise in US personal incomes
By Christopher S. Rugaber |
February 2, 2010, Tuesday
|
Print Edition
Print Edition
PERSONAL incomes in the United States rose more than expected in December and consumer spending increased for the third straight month, helping the economy slowly recover from the worst recession in decades.
The US Commerce Department yesterday said incomes rose by 0.4 percent, the sixth increase in a row. That's slightly better than analysts' expectations of 0.3 percent growth.
Income growth was spurred by a large, one-time social security payment. Wages and salaries rose by only 0.1 percent, or US$9.1 billion, after gaining 0.4 percent, or US$27 billion, in November.
Consumer spending, meanwhile, rose by 0.2 percent, less than analysts' forecasts of 0.3 percent. The department also revised November's figure to show a 0.7 percent gain in spending, higher than the initial estimate of 0.5 percent.
Consumer spending is closely watched because it accounts for about 70 percent of total economic activity. In last year's fourth quarter, consumer spending rose by 2 percent, down from a 2.8 percent increase in the July-September period.
That helped boost the nation's gross domestic product, the broadest measure of the economy's output, by 5.7 percent in the fourth quarter, the fastest growth in six years. The economy grew 2.2 percent in the third quarter after a record four straight quarters of decline.
Still, many economists are worried growth will likely slow to a 3 percent pace or below in the current quarter once temporary factors such as government stimulus and a slowdown in inventory cuts fades. Economists expect the economy to grow at about a 2 percent pace this year.
The US Commerce Department yesterday said incomes rose by 0.4 percent, the sixth increase in a row. That's slightly better than analysts' expectations of 0.3 percent growth.
Income growth was spurred by a large, one-time social security payment. Wages and salaries rose by only 0.1 percent, or US$9.1 billion, after gaining 0.4 percent, or US$27 billion, in November.
Consumer spending, meanwhile, rose by 0.2 percent, less than analysts' forecasts of 0.3 percent. The department also revised November's figure to show a 0.7 percent gain in spending, higher than the initial estimate of 0.5 percent.
Consumer spending is closely watched because it accounts for about 70 percent of total economic activity. In last year's fourth quarter, consumer spending rose by 2 percent, down from a 2.8 percent increase in the July-September period.
That helped boost the nation's gross domestic product, the broadest measure of the economy's output, by 5.7 percent in the fourth quarter, the fastest growth in six years. The economy grew 2.2 percent in the third quarter after a record four straight quarters of decline.
Still, many economists are worried growth will likely slow to a 3 percent pace or below in the current quarter once temporary factors such as government stimulus and a slowdown in inventory cuts fades. Economists expect the economy to grow at about a 2 percent pace this year.
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