U.S. consumers ramped up their spending in December even as their incomes grew more modestly, pushing the savings rate deeper into negative territory.

The U.S. Commerce Department reported today hat personal income increased at a seasonally adjusted rate of 0.4% after climbing a revised 0.4% in November. November’s gain was previously reported at 0.3%.

However, December personal consumption grew 0.9% after a revised 0.5% increase the prior month. November spending was originally seen up 0.3%.

The strong spending data suggests the U.S. economy will rebound from the anemic 1.1% growth seen in the fourth quarter.

Disposable personal income, or income after taxes, increased 0.4% following a revised 0.4% increase in November. Personal saving as a percentage of disposable personal income was negative 0.7% in December. The rate has been in negative territory eight times in nine months and was negative 0.2% in November. The savings rate for all of 2005 was negative 0.5%, the lowest annual savings rate since a decline of 1.5% in 1933.

The 0.5% decline in savings for the year followed a savings rate of 1.8% in 2004.

Spending on durable goods, or those designed to last three years or longer, rose 4.8% in December after a 3.5% increase in November. Nondurable goods spending inched up 0.1%, after a 1% decrease in November. December spending on services rose 0.5%; outlays went up 0.8% in November.