Despite a robust 0.7 percent increase in December, Americans' incomes failed to keep up with inflation last year, government figures showed yesterday.
The Commerce Department said incomes grew 6.0 percent during 1990. At the same time, inflation as measured by the Labor Department's consumer price index jumped 6.1 percent. Incomes totaled $4.65 trillion after advancing 7.7 percent in 1989.
Americans as a whole spent every bit of their added income. The report showed consumer spending rose an identical 6.0 percent last year. Consumption amounted to $3.66 trillion, following a 6.6 percent gain a year earlier.
The 0.7 percent income gain in December, to a seasonally adjusted annual rate of $4.75 trillion, came despite rising unemployment and was the largest since a similar 0.7 percent increase in March. It more than doubled last month's 0.3 percent inflation growth.
At the same time, consumer spending increased 0.7 percent to a seasonally adjusted annual rate of $3.75 trillion, up from a revised 0.1 percent advance in November and a 0.2 percent decline in October. Much of the boost was due to utility and new-car sales. It was the biggest gain since a 0.8 percent advance in September.
Americans' savings rate -- savings as a percent of disposable income -- slipped in 1990, to 4.5 percent compared with a 4.6 percent rate in 1989. The 4.2 percent rate for December was unchanged from November.