Americans cut spending in December by the largest amount since 2009, buying fewer cars and trucks and devoting less money to energy amid a deep plunge in oil prices. Yet incomes posted another solid again and falling inflation is allowing Americans to get more bang for their buck. Personal spending fell a seasonally adjusted 0.3% last month. Personal income, meanwhile, rose 0.3%. Both figures matched the estimate of economists polled by MarketWatch. Since income growth outpaced spending, the amount of money individuals save jumped to 4.9% from 4.3% to mark the highest level since midsummer. Meanwhile, inflation as gauged by the PCE price index slipped 0.2% in December. And the core rate that excludes food and energy was unchanged. The PCE index has risen a scant 0.7% in the past 12 months and it could decline a bit further because of sharply lower energy costs. The core rate has increased just 1.3% in the same 12-month span, well below the central bank's 2% target.
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