US consumers are still thrifty

AMERICAN consumers kept a tight grip on their wallets in December with spending up by just 0.2 per cent, after increasing by an upwardly revised 0.7 per cent in November, according to a report.

The Commerce Department report showed the third straight monthly rise in spending, which accounts for about two-thirds of the US economy, but it was less than economists had expected. Real disposable income rose by 0.3 per cent.

For the 2009 full year, consumer spending fell 0.4 per cent, the largest drop since 1938.