US consumer spending slows to 0.3% gain in December

WASHINGTON (AP) — U.S. consumer spending slowed in December as Americans spent more on prescription drugs and health care services but those gains did not offset a sharp slowdown in spending on new cars.

The Commerce Department said Friday that consumer spending rose a moderate 0.3% after a stronger 0.4% gain in November. Income growth also slowed in December, rising by 0.2%, just half the 0.4% increase in November.

Inflation as measured by a price gauge preferred by the Federal Reserve was up 0.3% in December compared to a 0.1% November increase.

However, for the full year, prices rose just 1.6%, well below the Fed’s 2% target.