WASHINGTON – Consumer spending rose in November by the most in five months as Americans took advantage of store discounts during the year-end shopping season, giving the world’s largest economy a lift.
Household purchases, which account for almost 70 percent of the economy, rose 0.5 percent after a 0.4 percent gain in October that was larger than previously estimated, the Commerce Department reported today in Washington. The median forecast of 76 economists in a Bloomberg survey called for a 0.5 percent rise. Incomes climbed less than forecast, reflecting a slump in earnings by farmers.
The report follows data last week that showed stronger momentum in economic growth as households stepped up spending. While some retailers have been discounting, an improved labor market and buoyancy in housing and stocks has lifted sales of cars, furniture, appliances and other durable goods.
“Jobs are growing, confidence is growing, households and asset values are climbing,” said Paul Edelstein, director of financial economics at IHS Inc. in Lexington, Mass. “There appears to be some sort of gathering momentum in the economy.”
Stock-index futures held earlier gains after the report. The contract on the Standard & Poor’s 500 Index maturing in March rose 0.5 percent to 1,823.3 at 8:50 a.m. in New York.
Projections for spending ranged from gains of 0.2 percent to 0.7 percent. October’s reading previously was reported as an increase of 0.3 percent.
Incomes increased 0.2 percent in November after dropping 0.1 percent the prior month. The Bloomberg survey median called for incomes to rise 0.5 percent. The gain was held back by a $12 billion decrease at an annual rate in farm income as commodity prices decreased.
Third-quarter gross domestic product expanded at the fastest rate in almost two years as Americans stepped up spending, the Commerce Department reported last week. Consumer purchases, which account for almost 70 percent of the economy, increased 2 percent, more than the previously reported 1.4 percent.