Consumer Spending Continues To Fall
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Americans in January continued to hold onto money they saved at the pump as consumer spending fell 0.2%. It was the second consecutive monthly decline and came in spite of a 0.9% uptick in real disposable income, a measure that includes inflation and taxes. Economists polled by the Wall Street Journal had predicted a 0.1% dip. Today's Commerce Department report includes consumer spending on gas, which has crumbled on account of plunging oil prices. A report last month showed a 0.1% rise in spending when gasoline purchases, building and car service purchases were excluded.
Money saved at the pump translated to actual savings, with that rate jumping to 5.5%, its highest level since 2012. Consumer spending comprises about 70% of the US's total economic output; it fell 0.3% last December.