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Apparel Spending Sputters in Late 2016

Consumer spending has been rising faster than incomes, according to the most recent U.S. Department of Commerce data, but apparel has not benefitted from the increase.

Total personal disposable income rose by 3.7% in December to $14.8 trillion, compared to the same month in the prior year.

Personal consumption expenditures jumped by 4.5%, their biggest increase in nearly two years, due primarily to a sharp rise in durable goods consumption, though spending on services also increased significantly.

Spending has outpaced income in each of the last four months, as the improving employment situation and financial markets helped restore consumer confidence.

Consumer spending on apparel and footwear increased by less than 0.8% in December, capping three consecutive months of less than 1 percent gains. Footwear spending increased by 2.5%, while consumption of apparel rose by a paltry 0.3% in the month.

The personal savings rate, which hit a 12-month high of 6.2% in March and then drifted lower for most of the rest of the year, edged down slightly to 5.4% in December.