November consumer spending up, savings drop
Consumer spending rose for a fifth straight month in November and incomes rose slightly more than expected, government data showed on Thursday, reinforcing views of a solid economic growth pace in the fourth quarter.
The Commerce Department said spending rose 0.4 percent after increasing by an upwardly revised 0.7 percent in October.
Economists polled by Reuters had expected spending, which accounts for about 70 percent of U.S. economic activity, to rise 0.5 percent last month after a previously reported 0.4 percent gain in October.
The report also showed the Federal Reserve's preferred measure of consumer inflation -- the personal consumption expenditures price index, excluding food and energy -- rose 0.1 percent after being flat for four straight months.
In the 12 months through November, the core PCE index rose 0.8 percent, the same margin as in October and still the smallest year-on-year gain since records started in 1960.
The gains in spending were the latest to suggest an acceleration in the growth pace this quarter after output increased at a 2.6 percent annualized rate in the July-September period.
Spending was supported by a 0.3 percent increase in incomes, which was slightly more than the 0.2 percent rise that economists had expected. Incomes rose 0.4 percent in October. Consumers also dipped into their savings to fund purchases.
Spending adjusted for inflation rose 0.3 percent after advancing 0.5 percent in October. The seventh straight month of gains bolstered views the spending pace gathered momentum in the current quarter after growing at a 2.4 percent rate in the July-September period.
The saving rate slipped to 5.3 percent last month, the smallest since March, from 5.4 percent in October. Savings dropped to $614.8 billion, the lowest level since March. (Reporting by Lucia Mutikani; Editing by Andrea Ricci)
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