U.S. consumer spending up 0.5 percent in November

Consumer spending in the United States rose by 0.5 percent in November, the fastest pace since July, the Commerce Department reported Friday.

The November gain followed an increase of 0.3 percent in the previous month and was smaller than the 0.6 percent rise expected by analysts.

Data showed that consumer spending on durable goods, big-ticket items expected to last at least three years such as cars and appliances, surged 1.2 percent in November, the strongest showing in four months.

Spending on non-durables such as food and clothes was up 0.7 percent last month, rebounding from a decline of 0.6 percent in October. Spending on services climbed 0.4 percent, following a 0.6 percent rise.

Consumer spending accounts for two thirds of overall economic activity and is a major force pushing the economy to expand.

Data also showed that incomes, the fuel for future spending, edged up 0.3 percent for the second consecutive month in November, shy of analysts' forecast of a 0.4 percent gain.

With spending growth outpacing income growth, Americans' personal savings rate declined to negative 1.0 percent of after-tax income last month. That was the worst showing since August.

A negative saving rate means that Americans are borrowing or dipping into savings to finance their consumption.

An inflation measure tied to the income and spending report showed that core prices, which exclude volatile food and energy, rose 2.2 percent over the last 12 months ending in November, compared with the 2.4 percent gain reported for the 12 months ending in October.

Source: Xinhua