Shoppers made something of the comeback in the United States last month.
The index known as personal consumer expenditure (PCE) bounced back 0.4% in November following a 0.1% dip in October. Spending on consumer durables jumped 2.7%, in line with the previously reported 8.7% jump in unit vehicle sales in the month. This more than reversed the 1.1% drop in durables consumption in October when Hurricane Sandy was reportedly to blame for much of a sizable 4.4% drop in vehicle sales.
On the other side of the coin, nominal spending on non-durable goods dropped 1.0%; however, this was entirely the result of falling prices, much of which reflects declining gasoline prices in the month, with the volume of sales of non-durable goods actually up 0.3% in November.
Services spending jumped 0.5% following a muted 0.1% gain in October and a 0.3% increase in September. Excluding the impact of prices, the volume of sales rose 0.6% following a 0.2% drop in October and a 0.5% increase in September.
The gain in spending in November was supported by a stronger-than-expected 0.6% gain in personal income following a smaller 0.1% increase in October. Part of the gain in incomes in November resulted from an easing in disruptions from Hurricane Sandy that contributed to a 0.6% gain in wages and salaries after a 0.3% drop in October.
The gain in overall personal income was matched by a 0.6% gain in disposable income. With disposable income growth outpacing spending growth in the month, the saving rate inched up to 3.6% from 3.4% in October.
On the inflation front, the core PCE measure was unchanged in November which resulted in the year-over-year rate of increase slipping to 1.5% from 1.6% in October.
