WASHINGTON -- Americans' personal income rose in December and they spent all of it and more, giving the nation's retailers one of their best holiday seasons in years.
The Commerce Department reported today that personal income, which includes wages, interest and government benefits, increased by 0.3 percent last month, following a 0.4 percent rise in November. December's gain -- the smallest increase since September -- was weaker than the 0.5 increase many analysts were anticipating.
Spending, meanwhile, rose a brisk 0.8 percent -- the biggest increase since August -- following a solid 0.7 percent gain in November. The increase in spending, right on target with analysts' expectations, gave merchants their best holiday sales since 1992.
With Americans spending more than they earned in December, the personal savings rate -- savings as a percentage of after-tax income -- was pulled to a record monthly low of 1.5 percent. In November, the savings rate was 2 percent.
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