Personal income in the U.S. increased by slightly more than anticipated in the month of December, according to a report released by the Commerce Department on Friday.
The report said personal income rose by 0.2 percent in December after climbing by a downwardly revised 0.4 percent in November.
Economists had expected income to inch up by 0.1 percent compared to the 0.5 percent increase originally reported for the previous month.
Disposable personal income, or personal income less personal current taxes, also crept up by 0.2 percent in December after rising by 0.4 percent in November.
Meanwhile, the report said real disposable income, which is adjusted to remove price changes, edged down by 0.1 percent in November after climbing by 0.3 percent in the previous month.
The Commerce Department also said personal sending climbed by 0.3 percent in December following a 0.4 percent increase in November, with the growth matching expectations.
Excluding price changes, personal spending inched up by 0.1 percent in December after rising by 0.3 percent in November.
“That doesn’t exactly provide a great hand-off to the first quarter but, with continued solid employment growth and buoyant consumer confidence, it still looks likely that consumption growth will rebound back above 2.0% annualized at the start of 2020,” said Andrew Hunter, Senior U.S. Economist at Capital Economics.
He added, “Otherwise, the 0.1% m/m decline in real disposable incomes in December looks disappointing, but in reality it was partly driven by another drop-off in farm subsidies paid out by the Trump administration.”
With spending increasing by more than income, personal saving as a percentage of disposable personal income dipped to 7.6 percent in December from 7.8 percent in November.
The report also said a reading on inflation said to be preferred by the Federal Reserve showed the annual rate of core consumer price growth ticked up to 1.6 percent in December from 1.5 percent in December.