Personal spending was flat in December

Personal income rose 0.3% in December, while personal spending was flat, a monthly Commerce Department release showed on Monday.

On Friday, we learned from the fourth-quarter gross domestic product data that consumer spending was the strongest in ten years in 2015, but cooled late in the year.

Economists had estimated that personal income rose 0.2% during December, and spending rose 0.1%, according to Bloomberg.

At the same time, the personal savings rate rose to 5.5%, the highest since 2012, compared to 5.3% in the prior period.

"The savings rate should drift lower over the next few months as people come to realize that the drop in energy prices is likely to persist for some time, making it safe to spend the windfall," Pantheon Macroeconomics' Ian Shepherdson wrote to clients.

Disposable income rose 0.4% in December and 3.5% in 2015, the biggest annual gain in nine years.

The Department of Commerce's release also contained data on personal consumption expenditures (PCE), or the prices paid for goods and services. It's the Federal Reserve's favorite way to measure inflation.

Core PCE, which excludes food and energy, was flat month-on-month (0.1% expected), and matched forecasts at 1.4% year-on-year, which still runs below the Fed's 2% target.