Strong growth in US Dec personal income and expenditures

The American consumer remains alive and kicking.

The US Commerce Department has reported that personal income increased 3.7 percent, disposable personal income (DPI) increased 4.0 percent and personal consumption expenditures (PCE) increased 0.8 percent in December. In November, personal income increased 0.4 percent, DPI increased 0.4 percent and PCE increased 0.4 percent based on revised estimates.

The increase in December personal income includes the payment of a special dividend by Microsoft. Excluding this dividend, personal income increased 0.6 percent in December.

Personal saving as a percentage of disposable personal income improved to 3.4 percent in December from 0.3 percent in November.

Helped by a fall in the PCE implicit price deflator in December, real DPI increased 4.2 percent for the month compared with an increase of 0.2 percent in November, while real PCE increased 0.9 percent compared with an increase of 0.2 percent in November.