TheAP has some great news about the US economy!
The Commerce Department reported Friday that consumer spending surged by 1.1 percent last month, nearly triple the October gain.
The November advance was the biggest one-month jump since a 1.2 percent rise in May 2004 and was significantly above the 0.7 percent analysts had expected.
Isn’t that just fantastic! Wait, there’s more!
Incomes were also up last month, rising by 0.4 percent, double the October increase but slightly below the advance that had been expected.
Hold on, what’s this?
An inflation gauge tied to spending showed a 0.6 percent increase in November, the biggest jump in more than two years, reflecting last month’s big surge in gasoline prices. Excluding energy and food, prices were up 0.2 percent. Core inflation is up 2.2 percent over the past 12 months, above the upper range of the Federal Reserve’s comfort zone of 1 percent to 2 percent.
Hmmmm… and this?
After-tax incomes were up 0.3 percent in November, but after adjusting for inflation, incomes actually fell by 0.3 percent after a 0.2 percent drop in October.
With spending rising at a faster rate than savings, the nation’s savings rate dipped into negative territory in November at 0.5 percent. That meant thathouseholds spent all of their incomes and either dipped into savings or borrowed to finance the higher level of spending last month.