WASHINGTON -- Real consumer spending rose 0.6% in November, marking the first gain since May, the Commerce Department reported Wednesday, as lower prices for gas and other goods have added to purchasing power.
The rise in real spending follows declines of 0.5% in both October and September. Real disposable income increased 1% in November, after a 0.7% gain in the prior month.
However, spending in current dollars, which are not adjusted for inflation, fell 0.6%, with consumers facing mounting job losses and an uncertain economic outlook. Analysts polled by MarketWatch had expected a 0.7% decline in consumers' current-dollar outlays.
Meanwhile, personal income in current dollars fell 0.2% in November, compared with a 0.1% gain in October, the government's data showed. Analysts had been looking for no gain in incomes for November.
As analysts had expected, the core personal consumption expenditure price index was unchanged in November. This inflation benchmark, also unchanged in October, is up 1.9% in the past year. The overall personal consumption expenditure price index dropped a hefty 1.1% in November.
Analysts at CIBC World Markets had been looking for a 1% decline in current-dollar spending.
"With hundreds of thousands of monthly job losses continuing to add up, and consumer credit more difficult to secure, consumer spending looks to be on a long downward trend," according to a CIBC research note prior to the data's release. "A large part of this decline should be due to plunging energy prices, but real spending should also be lackluster."
Also Wednesday, the Commerce Department reported that orders for durable goods dropped 1% in November, as orders for transportation goods decreased 7.4%. Economists surveyed by MarketWatch had been looking for an overall decline of 3% in orders for U.S.-made big-ticket items.
Source: marketwatch.com