Consumer Spending Grew Less Than Forecast in November

Consumer spending rose less than forecast in November as wages retreated for the first time in three months.

Hot Feature: Consumer Confidence Rose More Than Expected During the Holiday Shopping Season

Purchases rose 0.1 percent for the second consecutive month, Commerce Department figures showed today in Washington. Incomes grew 0.1 percent, the weakest in the last three months.

“In the absence of a significant pickup in income, we won’t see a big boost in spending,” said Yelena Shulyatyeva, an economist at BNP Paribas in New York. “The momentum will slow in the fourth quarter, but the economy is still growing.”

Consumer spending accounts for roughly 70 percent of the U.S. economy.

Durable goods orders jumped 3.8 percent in November, other figures from the Commerce Department showed.

Wages and salaries decreased 0.1 percent last month after a 0.6 percent gain in October. Disposable income adjusted for changes in prices and taxes was unchanged in November.

Despite stagnating incomes, Americans kept up spending last month, at the expensive of their savings, the rate of which fell from 3.6 percent in October to 3.5 percent in November.

Consumer spending adjusted for inflation, which is used to calculate gross domestic product, rose 0.2 percent for a second month in November.

Inflation-adjusted spending on durable goods increased 1.1 percent in November after a 1.3 percent gain the previous month. Outlays for non-durable goods, including gasoline, fell 0.1 percent last month.

Don’t Miss: U.S. Mortgage Rates Drop to New Record Low