WASHINGTON (MarketWatch) -- U.S. real consumer spending fell in December for the sixth time in seven months as consumers saved what they gained from falling energy prices, the Commerce Department reported Monday.

Nominal spending fell 1% in December, marking the sixth straight decline. This was in line with expectations of economists surveyed by MarketWatch. See Economic Calendar.

After adjusting for a 0.5% decline in prices, real consumer spending fell 0.5% in December, a reversal following a 0.3% increase in November, the government said. It was the sixth decline in real spending in the past seven months. Read the full government report.

Nominal incomes fell 0.2% in December. After adjusting for inflation and after paying taxes, real disposable incomes rose 0.3%.

With spending falling faster than incomes, the personal savings rate rose to 3.6% in December, the highest since May when savings were boosted by tax-rebate checks. "Apart from the disruptions caused by the recent tax rebate checks, the Microsoft special dividend, and the 9/11 terror attacks [it's] the highest level since 1999," said Harm Bandholz, an economist for UniCredit Markets.

In driving the savings rate higher, consumers have reduced their spending by about $400 billion from what it would be with a zero savings rate, said Tony Crescenzi, chief bond market strategist for Miller Tabak & Co. The drag from the increased savings is about 3% of gross domestic product, he said.

The Commerce Department report fills in monthly details provided on a quarterly basis in the gross domestic product report released last Friday, which showed the economy contracted at a 3.8% annual rate in the fourth quarter, the worst since the early 1980s. See full story.

Consumer prices fell 0.5% in December from November but were up just 0.6% compared with December 2007.

Core prices, which exclude food and energy prices in order to highlight underlying trends, were flat in December and were up 1.7% since December 2007, within the Federal Reserve's target zone of 1% to 2%.

Last week, Federal Open Market Committee policy makers cautioned that core inflation might head too close to zero for the U.S. central bank's comfort.

Details

Incomes measured in current dollars fell 0.2%, the third consecutive decline. Income from wages and salaries sank 0.3%, as more than half a million jobs were lost and hours worked were slashed.

Income from owning a business fell 0.6%. Income from assets dropped 1.5%. Rental income rose 4.8%

Real spending (inflation-adjusted) fell 0.5%. Real spending decreased 0.8% on durable goods, fell 1.8% on nondurable goods and rose 0.1% for services.