U.S. consumers kept their spending flat in December and instead boosted their savings rate to the highest level in three years.

Tomislav Forgo,ThinkStock

The Commerce Department says consumer spending was unchanged in December after rising 0.5 percent in November.

Incomes increased 0.3 percent, matching the November gain.

The rise in incomes and flat spending pushed the savings rate to 5.5 percent of after-tax income in December.

That was the highest level since December 2012.

Weak gains in consumer spending dragged the U.S. economy in the final three months of the year.

Overall growth slowed to a meager 0.7 percent rate in the fourth quarter.

Economists expect that an improving jobs market will boost spending this year and boost overall economic growth back above 2 percent.

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