US Personal Income And Spending See Matching Growth In November

Thomson ReutersShoppers take part in Black Friday Shopping at a Target store in ChicagoWASHINGTON (Reuters) – U.S. personal income in November rose for an eighth straight month on solid wage gains, which should support consumer spending and bolster economic growth next year.

Household expenditures, which account for nearly 70 percent of the economy, are being powered by steady hiring, cheap gasoline, and rising home equity that also lifted USA growth last quarter. Inflation is being closely watched by the Federal Reserve to determine the pace for hiking interest rates.

Estimates in the Bloomberg survey of 77 economists for consumer spending, before adjusting for changes in prices, ranged from no change to a 0.5 percent increase.

The rebound in consumer spending in November was probably kept in check by unseasonably mild weather, which had caused a sharp drop in demand for utilities.

Some of November’s consumer spending data was inadvertently released Wednesday night, according to the Commerce Department’s Bureau of Economic Analysis.

GDP growth estimates for the final three months of the year have been hovering around a 2 percent rate, the same pace of growth in the third quarter.

With spending outpacing income, savings fell to $747.6bn.

Inflation remained low, with a key price index increasing less than 0.1% in November. Core PCE prices, which strip out food and energy, rose 0.1 per cent in November, compared with less than 0.1 per cent in October.

The increase was in line with economists’ expectations, and while the October reading was revised downward from a previously reported 0.1 percent gain, spending in September was a bit stronger than earlier reported.