WASHINGTON — U.S. consumers increased their spending in December at a slower pace, while their income grew by the largest amount in eight years. Income surged because companies rushed to pay dividends before income taxes increased on high-earners.
The Commerce Department said Thursday that consumer spending rose 0.2 percent last month. That's slightly slower than the 0.4 percent increase in November.
Income jumped 2.6 percent in December from November, the biggest gain since December 2004. The main driver of the increase was dividend payments, which companies accelerated to beat the January rise in income tax rates.
Wages and salaries grew 0.6 percent.
Consumer spending, which accounts for about 70 percent of economic activity, is expected to slow this year. That's because consumers are receiving less take-home pay starting this month because of an increase in Social Security taxes.
Analysts predict the January report will show slower income growth because most bonuses and dividends were paid out in December.
- In faith communities, fraudsters prey on trust
- Efforts to stop excavation at Point of the...
- Got weeds? Hire a goat
- Want a better return on your college...
- Nu Skin Center to become new landmark in...
- Animal rights group threatens Utah fur farms...
- 'Pregnant' teen boys featured in Chicago's ad...
- Private school in Texas gives students...
- Animal rights group threatens Utah fur... 21
- Want a better return on your college... 17
- In faith communities, fraudsters prey... 10
- Groups hold public rally to 'Stop the... 7
- Efforts to stop excavation at Point of... 3
- Got weeds? Hire a goat 2
- Highly efficient 'passive homes' gain... 1
- Secret to Prism program: It's just one... 1