WASHINGTON, Dec. 23 (UPI) -- The Commerce Department on Monday reported that personal income rose for the fourth consecutive month during November while personal spending rose at its fastest pace since July.
The government agency said personal income rose 0.3 percent in November while personal spending rose 0.5 percent to $6.626 trillion at an annual rate.
Economists on Wall Street were expecting personal income to rise 0.2 percent after rising 0.1 percent in October and 0.4 percent in September. Economists were expecting spending to rise 0.5 percent after rising 0.4 percent in October and falling 0.4 percent September, which was its largest decline in 10 months.
Personal income is the dollar value of income received from all sources by individuals. Personal spending, or outlays, include consumer purchases of durable and nondurable goods, and services.
The income and outlays data are another gauge of the strength of the economy and where it is headed. Income gives households the power to spend and save. Spending greases the wheels of the economy and keeps it growing. Savings are often invested in the financial markets and can drive up the prices of stocks and bonds. Even if savings simply go into a bank account, part of those funds are typically used by the bank for lending and therefore contribute to economic activity.
The consumption, or outlays, part of the report is even more directly tied to the economy, which we know usually dictates how the markets perform. Consumer spending accounts for two-thirds of the economy, so if you know what consumers are up to, you'll have a pretty good handle on where the economy is headed. That is a big advantage for investors.
The latest report showed spending on durable goods such as autos, appliances, and other big-ticket, long-lasting items, rose 1.9 percent in November after falling 1.3 percent in October after sinking 5.1 percent in September.
Spending on non-durable goods rose 0.4 percent during the month after rising 0.6 percent during he previous month and slipping 0.1 percent in September.
The government agency said spending on services, which account for half of the report, rose 0.2 percent after rising 0.3 percent in September and 0.4 percent in September.
Disposable income, or the money left over after taxes, rose 0.4 percent in November after rising 0.2 percent in October and 0.5 percent in September.
Wages and salaries rose 0.4 percent after rising 0.3 percent during the previous month and 0.6 percent in September.
The government said the personal savings rate declined to 4.3 percent from 4.4 in both October and September.
