Nov Consumer Spending Down, Personal Income Down

Personal spending fell 0.6% in November, a bit better than the expected 0.7% drop, although personal income unexpectedly dropped, the Commerce Department said today.
November marks the fifth month in a row that consumer spending is down, the longest streak on record since the government began tracking the data in 1959. Economists were expecting a 0.7% drop. But adjusting for inflation, consumer spending rose 0.6% in November. That's the largest increase since June 2005, and due primarily to falling energy prices.

Personal income fell 0.2%, the first decline in four months and a surprise to economists who were expecting no change for the month. Commerce also revised October personal income down to a scant 0.1% gain.

Disposable income fell 0.1%, but after adjusting for inflation and taxes, real disposable income was up 1.0%. Inflation as measured by the core Personal Consumption Expenditures index, which excludes food and energy, was unchanged in November as expected. The headline PCE price index fell a record 1.1% in November.

Core PCE is up 1.9% over the last year, just under the 2.0% gain expected. Headline PCE is up only 1.4% over the last year, the smallest gain since August 2002