Consumer spending in the US climbed more than forecast in December even as incomes stagnated, showing the economy needs to generate bigger gains in employment to boost the expansion. Household purchases, which account for about 70% of the economy, rose 0.4%, after a 0.6% gain the prior month that was larger than previously estimated, commerce department figures showed on Friday in Washington. The median projection of 81 economists in a Bloomberg survey called for a 0.2% rise. Incomes were unchanged, pushing the saving rate to the lowest level in almost a year. The report follows data on Thursday that showed household spending rose in the fourth quarter at the fastest pace in three years, helping the economy overcome the fallout from the federal government shutdown.
Euro zone inflation falls unexpectedly in January
Euro zone consumer prices dropped in January, bucking market expectations for a rise, mainly due to a sharp fall in energy costs and complicating the European Central Bank’s task of supporting the bloc’s fragile economy. Consumer prices in the 18 countries sharing the euro fell to 0.7% year-on-year in the first month of 2014, down from 0.8% in December, data from the EU’s statistics office Eurostat showed on Friday. Inflation last touched the 0.7% level in October, which was the lowest inflation reading for the single currency in nearly four years. Economists polled by Reuters expected consumer price inflation to accelerate slightly to 0.9% in January, a level that is still well below the ECB’s target of close to but below 2%.
Honda Q3 net profit more than doubles to $1.56 bn
Honda Motor’s October-December net profit more than doubled to 160.7 billion yen ($1.56 billion), back to pre-Lehman crisis levels but lower than expectations, helped by strong sales of the redesigned Fit sub-compact that went on sale in Japan in September. The results, announced by Japan’s third-biggest automaker by sales volume on Friday, were below the average estimate of 172 billion yen in a Thomson Reuters I/B/E/S poll of seven analysts. In the same period a year ago, Honda booked 77.4 billion yen in net profit. For the