U.S. consumer spending fell in December, indicating that the economy lost traction at the beginning of the year due to supply chain disruption and a sharp rise in Covid-19 cases.
The Department of Commerce said Friday that consumer spending, which accounts for more than two-thirds of U.S. economic activity, fell 0.6 percent last month after rising 0.4 percent in November.
The data was included in the preliminary gross domestic product report for the fourth quarter released on Thursday.
The economy grew at an annualized rate of 6.9% last quarter, accelerating from the 2.3% pace in the July-September period. Throughout 2021, GDP grew by 5.7 percent.
Consumer spending is likely to decline as a result of Americans expecting their holiday shopping in October and the sharp rise in coronavirus infections.
The personal consumer spending index (PCE) rose 0.4% after rising 0.6% in November. In the 12 months to December, the PCE increased by 5.8 percent. This was the largest progress since 1982 and followed a 5.7% increase in November.
Self-confidence also declined
U.S. consumer confidence fell to its lowest level since November 2011 in January, according to the final estimate from the University of Michigan’s survey released Friday.
The index stood at 67.2 points, compared to 70.6 points registered in December.
Reference-www.eleconomista.com.mx