U.S. consumer spending fell in December as vehicle sales slowed and more households saved the extra cash from cheaper gasoline, the government reported Monday. The Commerce Department said consumer spending dropped 0.3 percent following a 0.5 percent gain in November. The December decline, which was slightly bigger than economists had expected, was the largest since September 2009. Cheaper gasoline and fewer auto sales accounted for most of the decline. Energy prices fell for the sixth consecutive month, plunging 5.2 percent in December. Personal income rose 0.3 percent in December, assisted by strong hiring over the past year. But rather than spend those gains, consumers saved 4.9 percent of their disposable income, up from 4.3 percent in November. Despite the December drop consumer spending - which accounts for 70 percent of U.S. economic activity - several indicators show that Americans are growing more comfortable about the economy and are spending at a healthy rate. Consumer spending rose at an annual pace of 4.3 percent during the fourth quarter of 2014, the strongest rate since early 2006, the government reported last week. The surge helped push overall gross domestic product (GDP) growth to a 2.6 percent annual rate. Lower gasoline costs limited price pressures in December, with a key inflation gauge falling further below the Federal Reserve (Fed) 2-percent target. A price index tied to consumer spending fell 0.2 percent last month after a similar decline in November. In the 12 months ending in December, the personal consumption expenditures (PCE) price index rose 0.7 percent, the tamest reading since 2009.
