WASHINGTON (UPI) — U.S. consumer spending rose marginally in December — half the pace of November’s gain — the Commerce Department said Thursday.
Consumers spent $22.6 billion more than they did in November, as spending rose 0.2 percent after rising 0.4 percent in November. But the gain was outpaced by a 2.6 percent rise in personal incomes, the department’s Bureau of Economic Analysis said.
With income growth rising faster than spending, disposable Income, sums taken in above and beyond what was spent on basic needs, rose 2.7 percent in the month.
The bureau said incomes in November and December were “boosted by accelerated and special dividend payments to persons and by accelerated bonus payments and other irregular pay … in anticipation of changes in individual income tax rates.”
Dividend and bonus pay was accelerated to beat a likely income tax increase. In early January, the tax rate was raised for individuals earning $400,000 per year or above and for households with total earnings of $450,000 per year or above.