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Personal spending in US rises 0.5% in November

US personal spending increased in November at the fastest rate since July, as consumers helped to support the recovery.

The 0.5 percent gain in spending at an annual rate was the second straight increase, following a 0.4 percent rise in October, the Commerce Department said. The increase was led by rising orders for durable goods such as autos. Incomes gained 0.3 percent for the fourth consecutive month.

"It takes a real shock to knock the consumer down," said David Rosenberg, chief North American economist at Merrill Lynch, before the report.

Sales may not have maintained their November momentum into this month, sparking concerns about a lackluster holiday season.

Target Corp, Wal-Mart Stores Inc and Federated Department Stores Inc. are among retailers whose sales were at the low end of or below their own estimates in the next to last week before Christmas. Responsible for two-thirds of gross domestic product, consumers are critical to the health of the economy.

Economists had expected a 0.5 percent increase in spending and a 0.2 percent rise in incomes for November, based on the median of 41 estimates in a Bloomberg News survey.

While consumer confidence rose this month to its highest in four months, growing unemployment, war fears and weaker equity and home prices have led economists to predict household spending will soon cool. Spending will probably grow at a 1.1 percent annual pace in the final three months of this year, the slowest in nearly a decade, according to the Blue Chip Economic Indicators December survey.
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