Personal consumption expenditures (PCE) for the sector fell 0.11 percent in December to $413.01 million compared to $413.45 million in November, after peaking for the year in October at $415.02 million. Monthly spending on clothing and footwear was up and down throughout 2019, likely reflecting the category’s seasonality and uneasy consumer economic confidence.
Similar patterns were found in retail sales reported by the U.S. Census Bureau Retail, which earlier this month said clothing and accessories store sales were down 1.6 percent in December year-over-year. Overall retail sales in December, excluding auto dealers, gas stations and restaurants, increased a seasonally adjusted 0.5 percent over November, which had dipped 0.1 percent from October.
Outpacing the spending in clothing and footwear, BEA reported that overall PCE increased 0.3 percent, or $46.6 billion, last month. Real PCE, adjusted for inflation, rose 0.1 percent, or $6.8 billion, while the PCE price index increased 0.3 percent. Excluding food and energy, the core PCE price index was up 0.2 percent.
The increase in real PCE in December reflected an increase of $2.5 billion in spending on goods and a $4.4 billion rise in spending on services, BEA said. Within goods, spending on prescription drugs was the leading contributor to the increase, while in services, the largest contributor to the increase was spending on health care.
Personal income rose 0.2 percent, or $40.7 billion, in December, according to BEA. Disposable personal income (DPI), a key gauge for retail spending, increased 0.2 percent, or $30.6 billion. Real DPI decreased 0.1 percent in the month.
The increase in personal income in December primarily reflected increases in compensation of employees and personal interest income that were partially offset by a decrease in farm proprietors’ income, BEA said. Farm proprietors’ income decreased $36.2 billion in December, which included a decrease in subsidy payments associated with the Department of Agriculture’s Market Facilitation Program, which includes cotton growers.
Personal outlays increased $51.5 billion in December, while personal saving was $1.28 trillion. The personal saving rate–personal saving as a percentage of disposable personal income–was 7.6 percent.