Consumer Spending Takes Major Dip Despite Oil's Fall
The Commerce Department reported this morning that US consumer spending fell 0.3% in December, the biggest decline since late 2009. The dip followed November's 0.5% gain and came in spite of a 50%+ collapse in oil prices that has resulted in hefty gasoline savings.
Earlier this month, a Bloomberg survey showed a 7.5% jump in consumer confidence prompted by the estimated $750 in average household savings from the oil bust. Reuters notes that those savings are still expected to boost spending in the first quarter, but that in December Americans were more likely to sock it away. The savings rate in December jumped to 4.9% from 4.3%.