Data show strong buying

Keeping the nation’s cash registers ringing, consumers boosted their spending in November by the largest amount in four months, the government reported Friday, raising hopes that shoppers will act more like Santas than Scrooges during the holidays.

The Commerce Department said consumer spending rose 0.5% last month. That was up from a 0.3% gain in the previous month and was the strongest showing since July.

“It is clear that Santa Claus came to town early with this report,” said Richard Yamarone, an economist at Argus Research. “You can’t underestimate the consumer.”

With Christmas falling on Monday, today is expected to be the busiest shopping day. Retailers are pulling out all the stops to hit their holiday sales goals by expanding hours in the final days before Christmas and ratcheting up discounts.

Friday’s report also showed that Americans’ incomes -- the fuel for future spending -- rose a modest 0.3% for the second month in a row.

The income and spending figures aren’t adjusted for inflation.

In other economic news, manufacturers saw demand for big-ticket goods rebound last month, the Commerce Department said in a second report. Orders for costly manufactured goods went up 1.9%, a turnaround from an 8.2% plunge in October.

But excluding volatile transportation orders, which are heavily skewed by aircraft, durable goods orders fell 1.1%, the second straight monthly decline. That raised some concerns about business spending.

As troubles linger for the housing sector, economists say it’s crucial for other economic sectors to stay healthy.

Some analysts -- cheered by the latest consumer spending figures -- think that economic growth in the current quarter could prove stronger than most had thought.

Thus far, consumers are doing their part to help keep the economy growing.

In November, consumers boosted spending on big-ticket goods -- such as cars and appliances expected to last at least three years -- by 1.2%, the most since July.

Spending on “nondurables,” such as food and clothes, rose by a solid 0.7% after a 0.6% decline the month before. Spending on services increased 0.4% after a 0.6% rise.

With spending growth outpacing income growth, Americans’ personal savings rate -- savings as a percentage of after-tax income -- slipped to negative 1% in November, the worst showing since August.

In the manufacturing report, factories saw new orders rise in November for computers and communications equipment, as well as cars and airplanes. But demand for machinery, electrical equipment and primary metals, including steel, ebbed.

Manufacturers are having to deal with some fallout related to problems in the housing market as well as the struggling automotive industry, analysts said.

There was some encouraging news Friday about inflation.

A measure tied to the income and spending report showed that “core” prices, which exclude food and energy, moderated last month. Those prices rose 2.2% over the 12 months that ended in November. That was an improvement from the 2.4% gain reported for the 12 months that ended in October.

Even so, core inflation is still higher than the Federal Reserve would like.