---
title: Consumer Spending Gains in December Driven by Durable Goods Purchases
description: Explore December's consumer spending trends, led by durable goods like light trucks and software, and understand the impact on savings, inflation, and retail inventories.
---

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# [Consumer Spending Gains in December Driven by Durable Goods Purchases](https://today.ftrintel.com/consumer-spending-february-2025)

 Written by [Avery Vise, VP of Trucking](https://today.ftrintel.com/author/avery-vise) | 2/6/25 1:45 PM

Consumer spending continued to rise in December, with purchases of goods—especially durable goods—leading the gains. Total inflation-adjusted consumer spending rose **0.4% month-over-month (m/m)** on a seasonally adjusted basis and was up **3.1% year-over-year (y/y)** compared to December 2023.

## **Durable Goods Outpace Nondurables in Spending Growth**

Real spending on **goods** increased **0.7% m/m**, outpacing the **0.3% m/m** increase in real spending on services. On an annual basis, goods spending grew **3.5% y/y**, while services spending rose **2.9% y/y**.

Among goods, **durable goods spending** saw the strongest growth, rising **1.1% m/m**, more than twice the growth rate of nondurables (**0.5% m/m**). A key contributor to durable goods growth versus November was **computer software and accessories.  **Compared to December 2023, the strength was especially in **new light truck sales**, which pushed durable goods spending up **6.1% y/y**. Meanwhile, nondurable goods spending was up **2.2% y/y**, mainly due to increased spending on **food and beverages**.

## **Quarterly and Annual Trends**

For the **fourth quarter of 2024 (Q4 2024)**:

- Real spending on goods rose **1.6% quarter-over-quarter (q/q)** and was up **5.4% y/y**.
- Real spending on services saw **a smaller 0.8% q/q increase**, but its y/y growth was stronger at **9.2%**.
- Overall, **inflation-adjusted consumer spending** for 2024 increased **2.8%**, with **services spending rising 2.9%** and **goods spending growing 2.4%**.

## **Lower Savings as Consumers Keep Spending**

Continued spending growth has come at the expense of personal savings. The **personal saving rate** in December fell to **3.8% of disposable income**, marking the lowest level in two years. However, it’s important to note that **revisions in income and expenditures often impact the personal saving rate calculation**.

For **2024 as a whole**, the personal saving rate averaged **4.7%**, the same as in 2023. This follows major fluctuations seen during the pandemic years of 2020-2022.

## **Inflation and PCE Price Index Trends**

The **Personal Consumption Expenditures (PCE) price index**, a key inflation measure, posted its **largest m/m increase since April**, rising **2.6% y/y**, the highest since May.

- **Energy prices** contributed significantly to this increase.
- Core PCE (excluding food and energy) rose at a smaller rate than in November, with a **2.8% y/y increase**, aligning with October and November levels.

## **Retail Inventories See First Decline in Over a Year**

One of the more notable shifts in December was the decline in **retail inventories**, particularly in the automotive sector:

- **Motor vehicle and parts inventories** fell **1.2% m/m**, following a **0.9% drop in November**—the first back-to-back decline since October 2021.
- Overall **retail inventories dropped 0.3% m/m**, marking the **first decline in over a year** and the **largest drop since September 2022**.
- Excluding automotive, retail inventories still increased **0.2%**.

The **inventories-to-sales ratio** for total retail dropped to **1.3**, its lowest since April. The ratio for **motor vehicles and parts fell to 1.88**, the lowest since March, signaling tighter inventory levels heading into 2024.

## **Key Takeaways**

- Consumer spending growth in December was **led by durable goods**, with **new light trucks** and **computer software/accessories** driving gains.
- Spending growth came at the expense of **personal savings**, which fell to its lowest level in two years.
- Inflation pressures resurfaced, with the **PCE price index up 2.6% y/y**, largely due to **rising energy costs**.
- **Retail inventories declined**, with **automotive inventories seeing the steepest drop** since April 2022.

As we move into 2024, the balance between **consumer spending, inflation trends, and inventory management** will be critical factors to watch in assessing the broader economic outlook.

 

[View full post](https://today.ftrintel.com/consumer-spending-february-2025)

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