Monday’s government report indicated that the income gain would have been a smaller 0.6% in December without the one-time $3 per share dividend payment Microsoft made on December 2, the Associated Press reported.
While it is unusual for a dividend payment from a single company to blast its way through the US economy, Microsoft is one of the most widely held stocks in America and the $32 billion size of the payment rivaled the $38 billion in federal income tax rebates paid in 2001.
For all of 2004, personal incomes increased by 5.4%, the largest annual advance since an 8% jump in 2000, the last full year of the decade-long economic expansion. Since the 2001 recession and an extended jobless recovery, personal incomes have grown at much smaller rates of 3.5% in 2001, 1.8% n 2002 and 3.2% in 2003, according to the government data.
Consumer spending rose by 6.1% last year, the best showing since a 7.3% advance in 2000. Spending had been up 5.2% last year.