Thursday January 31, 01:50 PM
Spending, incomes rise in US despite housing trouble
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WASHINGTON (AFP) - US household incomes rose a solid 0.5 percent in December despite turmoil in the economy while consumer spending edged up 0.2 percent, government data showed Thursday.
The Commerce Department's monthly survey was stronger than expected as most analysts had expected a 0.4 percent rise in income and a 0.1 percent gain in spending.
The report showed growing incomes and modest spending gains despite an economic slowdown driven by a deep housing slump that some analysts fear may turn into recession.
Despite the rise, consumer spending -- which accounts for about two-thirds of economic activity -- rose at the slowest pace in 15 months, the report said.
Over the full year 2007, incomes increased 6.2 percent and spending rose 5.5 percent.
An inflation gauge in the report showed consumer prices up a modest 0.2 percent, down from a 0.6 percent increase in November (Frankfurt: A0S9N7 - news) . Core (Berlin: LJ1.BE - news) prices, excluding food and energy costs, also increased 0.2 percent in the month.
Over the 12 months to December, prices were up 3.5 percent and core prices rose 2.2 percent.
Real (Frankfurt: BJU.F - news) disposable income, adjusted for inflation, rose 0.2 percent in December, after a decline of the same amount in November.
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