Consumer spending sank at a 3.5% annual rate, similar to its third-quarter drop, despite a big rise in real after-tax income, thanks to the huge drop in petrol prices.

The personal savings rate - the share of after-tax income saved - reached a low of about 1 percent in 2005.

Americans now save more than 5% of their after-tax income, still well below the post-war average but hugely up from only a year ago.