WASHINGTON (MarketWatch) — Americans boosted their savings in December and cut spending by the largest amount in five years, paying less at the gas pump and buying fewer cars and trucks.

Incomes posted another solid again in the final month of 2014, however, and falling inflation is allowing Americans to get more bang for their buck. What’s more, spending in the first few months of the fourth quarter was more than enough to offset the December decline and deliver the biggest increase in consumer outlays since 2006, a separate government report showed last week.

In December, consumer spending fell a seasonally adjusted 0.3% to mark the biggest drop since September of 2009, the Commerce Department said Monday. Americans cut back on most goods and services, including autos, gas, utilities, groceries, clothing, home furnishings and TVs.

When adjusted for falling inflation, the decline in consumer spending was a more modest 0.1%.

Personal income, meanwhile, rose a solid 0.3% last month, a sign that the rapid acceleration in hiring continues to filter through to the broader economy. For the full year, incomes climbed 3.9% — almost twice as fast as in 2013.

The U.S. added nearly 3 million jobs in 2014, the largest gain in 15 years. And the majority of new jobs pay above the average U.S. hourly wage, a MarketWatch breakdown has shown.

“Consumer spending growth will be solid in 2015 thanks to more jobs, higher wages, and lower energy costs,” said Gus Faucher, senior economist at PNC Financial Services.

Households are reaping a tidy windfall from plunging gas prices, and while economists expect to them to spend most of the money, it hasn’t happened yet. The savings rate jumped to 4.9% in December from 4.3% — the highest level since midsummer — as Americans chose to pocket more of their cash.

Falling energy costs are also pushing inflation lower and allowing Americans to stretch their paychecks further. Inflation as gauged by the PCE price index slipped 0.2% in December. And the core rate that excludes food and energy was unchanged.

The PCE index has risen a scant 0.7% in the past 12 months, the smallest increase since late 2009. And it could decline a bit further because of sharply lower energy costs.

Inflation is now running well below the Federal Reserve’s 2% target, and that could lead the central bank to wait even longer before raising a key short-term interest rate for the first time since 2006.