US personal income rises in boost to consumer spending
WASHINGTON: US 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.
The Commerce Department said on Wednesday income increased 0.3 percent last month after an unrevised 0.4 percent rise in October. Economists polled by Reuters had forecast income advancing 0.2 percent last month.
Wages and salaries rose 0.5 percent, adding to a 0.6 percent gain in October. A tightening labor market, marked by an unemployment rate that is in a range some Federal Reserve officials consider consistent with full employment, is starting to lift wages. The Commerce Department’s Bureau of Economic Analysis inadvertently released part of the consumption portion of its report late on Tuesday. It showed consumer spending increased 0.3 percent last month after being unchanged in October.
Consumer spending, which accounts for more than two-thirds of US economic activity, rose 0.3 percent when adjusted for inflation after holding steady in October. While consumer spending is likely running below the third-quarter’s annualized brisk pace of 3.0 percent, November’s increase could prompt economists to modestly lift their fourth-quarter gross domestic product estimates.
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 $747.6 billion. Still, they remain at lofty levels. Inflation continued to run below the Fed’s 2 percent medium-term target last month. A price index for consumer spending was unchanged after nudging up 0.1 percent in October.