Personal Income and Spending Up in November

Americans earned and spent more in November than a month earlier, suggesting that shoppers still are underpinning growth in the year’s final three months. Consumer confidence fell less in December than economists had forecast, reports showed Tuesday.

Consumer spending rose 0.4% in November, and personal income rose 0.5%, the biggest increase since June 2002, the Commerce Department said. The University of Michigan’s consumer sentiment index fell to 92.6 this month, down from 93.7 in November. This month’s reading was 3 points higher than a preliminary estimate two weeks ago.

The economy grew at an 8.2% annual rate last quarter, the fastest since the final three months of 1983, the Commerce Department confirmed Tuesday. Growth is forecast to slow to about half that pace this quarter, resulting in a growth rate for the entire year of 3.1%, the most in three years.

“It’s only natural that we would see some moderation in spending on top of a frenzied pace in the third quarter,” said Jade Zelnik, chief economist at RBS Greenwich Capital in Greenwich, Conn. “If job growth continues to strengthen, then personal income will benefit and it will help consumer spending.”

November’s results followed October gains of 0.1% for spending and 0.2% for income, the Commerce Department said.

Though the University of Michigan sentiment index slipped from last month, November’s figure was the highest in more than a year and a half.

“Consumer confidence has been in a fairly narrow range since June and is now toward the high end of that range,” said Robert Mellman, an economist at J.P. Morgan Securities Inc.

The U.S. gross domestic product in the third quarter totaled $10.493 trillion, after being annualized and adjusted for inflation, the Commerce Department said in its final report on the quarter.

Spending on durable goods such as autos and furniture rose 1.1% last month after falling 1% in October. Adjusted for inflation, durables spending rose 1.4%.