Monday, January 31, 2011

Congratulations, consumers - You spent more!

If you maxed out your credit cards out or tapped your savings account to buy Christmas gifts last year, you're not alone - spending was way up last year, especially during the holidays, the government said Monday.

Consumer spending last year rose at the fastest clip since before the recession, according to U.S. Commerce Department figures released Thursday.

For all of 2010, consumer spending rose 3.5 percent. That's the most since a 5.2 percent jump in 2007. And spending last year was helped by a robust 4.4 percent increase in the last quarter of 2010, the critical holiday shopping season.

In December, consumers spent about .7 percent more than the previous month, according to the Commerce Department. Spending on non-durable goods such as clothes and food were up 1.5 percent, durable goods such as cars rose .7 percent and spending on services was up .4 percent.

A payroll tax cut that recently took effect is expected to help keep spending up, as could any boosts in employment. These latest figures are a sign the economy could be rebounding, but its unclear how long any gains will be sustained in the face of a still-grim housing market and high joblessness.

You can read a longer Associated Press story about the spending increase here.