Consumer spending dropped in December for the second month in a row, as consumers retrenched after a bumpy year colored by a strong job market but also rapid inflation that eroded savings and posed a financial challenge for many Americans.
Personal spending fell by 0.2 percent in December, the Commerce Department said Friday. After adjusting for inflation, spending fell 0.3 percent. Spending for November, which the government initially reported as a modest increase, was revised to show a small decline.
Incomes continued to rise, reflecting the strong job market. But instead of continuing to spend, Americans chose to save more, a sign that consumers might be becoming more cautious amid news of layoffs and talk of a possible recession.
Friday’s data is among the last readings on the state of the economy that the Federal Reserve will receive before it announces its next interest rate decision on Feb. 1. The central bank is widely…
