U.S. Personal Spending Growth Picks Up; Income Gain Moderates

Personal consumption expenditures increased 0.6% (4.5% y/y during November following a 0.2% October gain, revised from 0.3%. A 0.4% rise had been expected in the Action Economics Forecast Survey. Adjusted for price inflation, personal spending increased 0.4% (2.7% y/y) after holding steady. Real durable goods purchases rose 0.2% (7.1% y/y) and repeated October's gain. Motor vehicle buying declined 2.6% (+4.2% y/y) after a slight decline. Real spending on home furnishings & appliances jumped 1.7% (9.4% y/y), the third consecutive month of strong increase. Real spending on recreational goods & vehicles surged 2.6% (9.2% y/y) following a 0.3% decline. Constant dollar spending on nondurable items rose 0.7% (3.0% y/y), the strongest increase since March. Real purchases of clothing & footwear strengthened 2.5% (4.9% y/y), the strongest rise since March 2007. Real spending on gasoline & oil eased 0.2% (-1.8% y/y) after a 0.4% slip. Real spending on food & beverages rose 0.5% (2.5% y/y) following a 0.3% rise. Real spending on services gained 0.4% (1.9% y/y) on the heels of a 0.1% slip. Real recreation spending increased 1.0% (2.0% y/y) after a 1.3% fall. Real health care outlays rose 0.2% (2.6% y/y) following a 0.1% uptick, while housing & utilities expenditures improved 0.4% (1.5% y/y) after holding steady.

Personal income rose 0.3% (3.8% y/y) last month following an unrevised 0.4% October gain. A 0.4% rise had been expected. Wages & salaries rose 0.4% (4.5% y/y) following a 0.2% increase. Rental income improved 0.7% (6.3% y/y) after a 1.0% jump. Proprietors' income improved 0.6% (3.3% y/y), about as it has for four straight months. Interest income surged 1.2% (4.2% y/y) for a second consecutive month. Dividend income fell 0.6% (+0.9% y/y) following a 0.1% uptick. Personal transfer receipts fell 0.2% (+3.0% y/y), the first decline since April. Social Security payments declined 0.8% (+3.3% y/y) and reversed October's increase. Medicare payments gained a steady 0.3% (2.9% y/y). Unemployment insurance benefits rebounded 1.1% (-8.5% y/y) following after three months of sharp decline.

Disposable income gained 0.4% (3.7% y/y) for the third straight month. Adjusted for price changes, take-home pay inched 0.1% higher (1.9% y/y) after a 0.3% rise that followed four consecutive months of zero increase.

The personal savings rate declined to 2.9%, the lowest level since November 2007. Personal saving declined by 17.1% y/y.

The PCE chain-type price index improved 0.2% (1.8% y/y) after a 0.1% uptick. Excluding food & energy, prices nudged 0.1% higher (1.5% y/y) following two 0.2% gains. Nondurable goods prices jumped 0.5% (+1.9% y/y) with a 7.0% surge (16.2% y/y) in gasoline prices, which followed a 2.1% decline. Durable goods prices offset some of this increase with a 0.2% decline (-1.5% y/y) after holding steady. The price index for recreational goods & vehicles fell 0.8% (-2.8% y/y) while motor vehicle costs rose 0.3% (-0.4% y/y). Services prices improved 0.2% (2.3% y/y) following two months of 0.3% increase. Moderation in price gains was widely exhibited.

The personal income & consumption figures are available in Haver's USECON database with detail in the USNA database. The Action Economics figure is in the AS1REPNA database.