U.S. consumer spending falls in December; inflation increases

[mahatmakanejeeves]

Source: Reuters, via Yahoo! Finance

Reuters

U.S. consumer spending falls in December; inflation increases

Fri, January 28, 2022, 8:42 AM

WASHINGTON, Jan 28 (Reuters) - U.S. consumer spending fell in December, suggesting the economy lost speed heading into the new year amid snarled supply chains and raging COVID-19 infections, while annual inflation increased at a pace last seen in the early 1980s. ... The Commerce Department said on Friday consumer spending, which accounts for more than two-thirds of U.S. economic activity, dropped 0.6% last month after gaining 0.4% in November. Economists polled by Reuters had forecast consumer spending declining 0.6%.

The data was included in the advance gross domestic product report for the fourth quarter published on Thursday. The economy grew at a 6.9% annualized rate last quarter, accelerating from the July-September quarter's 2.3% pace. ... That boosted growth in 2021 to 5.7%, the strongest since 1984. The economy contracted 3.4% in 2020.

Consumer spending dropped, likely the result of Americans starting their holiday shopping in October for fear of empty shelves at stores because of rampant shortages of goods, including motor vehicles. Skyrocketing coronavirus infections driven by the Omicron variant also reduced traffic to places like restaurants and bars, as well as other high contact venues.

The shortages owing to overstretched supply chains kept inflation elevated last month. The personal consumption expenditures (PCE) price index increased 0.4% after rising 0.6% in November. In the 12 months through December, the PCE price index increased 5.8%. That was the largest advance since 1982 and followed a 5.7% year-on-year increase in November.

{snip}

(Reporting by Lucia Mutikani Editing by Chizu Nomiyama)

Read more: https://finance.yahoo.com/news/u-consumer-spending-falls-december-134207622.html

[JT45242]

1. If they bought most of their gifts in October and November ...

What was the year on year change? These kind of headlines iritate me as short term (month to month changes) can make something look bad when in fact, it is showing a healthy economy.

Consumer spending shoud be compared to previous year or three year average not only the previous month.

Just another gloom and doom headline to twist the narrative form the reality that the economy is in a much better place than it was one year ago.

[Alexander Of Assyria]

2. Yes sir, precisely...booming economy maybe have something to do with...like really really booming?

The corporate mass media is particularly in propaganda mode when a Democrat is in charge of a booming economy, best in decades by any measure you choose.

[mpcamb]

3. Of course it did. People (sensibly) traveled less. Less gas, air, food and lodging costs.

[Historic NY]

4. Do they even agres with each other?

[link:https://www.cnbc.com/2021/12/03/holiday-shopping-2021-spending-set-to-blow-past-records-nrf-says.html|