Figures released by the U.S. Commerce Department on Jan. 31 showed a 7% increase in consumer spending in December 2010, compared with the previous month. This continues an upward trend: Personal expenditures also rose in November 2010 by 4%.
Personal income increased 4% for the second straight month in a row, according to the Bureau of Economic Analysis.
“Today’s data show consumer spending clearly accelerated at the end of last year,” said U.S. Commerce Department Acting Deputy Secretary Rebecca Blank. “Personal income also posted stronger gains in the fourth quarter compared with the third. Looking ahead, we expect disposable personal income to get a boost from the Middle Class Tax Relief Act of 2010, which increases the take-home pay of many working families. Taken together, we expect these income and spending data to support stronger economic growth in 2011 -- a top priority for President Obama and this administration."
Other data released by the Commerce Department showed that private wage and salary disbursements increased $15.5 billion in December 2010, compared with an increase of $5.9 billion in November. Goods-producing industries' payrolls increased $1.5 billion, in contrast to a decrease of $2.5 billion; manufacturing payrolls increased $0.2 billion, in contrast to a decrease of $2.5 billion. Services-producing industries' payrolls increased $14.0 billion, compared with an increase of $8.4 billion. Government wage and salary disbursements increased $1.6 billion, compared with an increase of $1.3 billion.
For all of 2010, the economy grew 2.9%, the best performance since 2005. Overall, wages grew by 3%, and inflation is up 1.2% to the end of December.