U.S. consumer purchases climbed in December by the most in three months as incomes picked up, signaling a strong hand-off into 2017.
The 0.5 percent advance in consumption, which accounts for about 70 percent of the economy, followed a 0.2 percent advance in the prior month, a Commerce Department report showed Monday. The December increase matched the Bloomberg median forecast. Incomes rose 0.3 percent, less than projected.
Americans stepped up purchases during the holiday season and sales of automobiles stayed strong, capping a record year for the car industry. Solid hiring, rising wages, and low borrowing costs have increased the wherewithal to spend, while rising sentiment and expectations of lower taxes under President Donald Trump are potential tailwinds.
“The consumer has almost everything going for it,” Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, said before the report. “As the consumer goes, so goes our economy. We’re setting up for another decent year in 2017.”
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