U.S. consumer spending softens, but savings hit three-year high. Fred Katayama reports.
Americans aren't spending more. They're saving more. That's what the U.S. Commerce Department says in its report for December. Category-wise, consumers spent less on long-lasting manufactured goods - think cars - and nondurable goods - things like cosmetics, office supplies, and clothing. Overall, consumption was flat. That's not good for growth. Consumer spending accounts for more than two-thirds of U.S. economic activity. That same government report says, income is on the up and up. But consumers are stuffing their money into their piggy banks, leading savings to surge to their highest level in three years. Barclays' Michael Gapen. (SOUNDBITE) MICHAEL GAPEN, HEAD OF U.S. ECONOMICS RESEARCH, BARCLAYS (ENGLISH) SAYING: "Consumers are seeing something that we're not, and that the business sector isn't, that things are going to worsen, and incomes are going to fall. Therefore, the household is right to save" Those higher savings, coupled with rising home prices, should help soften the blow from the recent stock market sell-off, and drive spending in early 2016.