In this Jan. 9, 2020, photo Chevrolet Silverado pick-up trucks are lined up on the sales lot at the Betley Chevrolet dealership in Derry, N.H. On Friday, Jan. 31, the Commerce Department issues its December report on consumer spending, which accounts for roughly 70 percent of U.S. economic activity. (AP Photo/Charles Krupa)

US consumer spending slows to 0.3% gain in December

January 31, 2020 - 8:35 am

WASHINGTON (AP) — U.S. consumer spending slowed in December as Americans spent more on prescription drugs and health care services but those gains did not offset a sharp slowdown in spending on new cars.

The Commerce Department said Friday that consumer spending rose a moderate 0.3% after a stronger 0.4% gain in November. Income growth also slowed in December, rising by 0.2%, just half the 0.4% increase in November.

Inflation as measured by a price gauge preferred by the Federal Reserve was up 0.3% in December compared to a 0.1% November increase.

However, for the full year, prices rose just 1.6%, well below the Fed’s 2% target.

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