US consumer spending edged up a slim 0.2 per cent in November, much weaker than October's robust 0.8 per cent jump as purchases of new cars dropped sharply, a government report today showed.
The department previously said October spending had risen 0.7 per cent, but revised that up. After adjusting for inflation, November's personal spending was flat after posting a 0.4 per cent gain in October, the US Commerce Department said.
The data suggested that the holiday shopping season that runs from Thanksgiving in late November through Christmas got off to a soft start, and that has been borne out in many of the retailers' reports since that time as well as by the discounting evident in many stores just ahead of Christmas gift-giving. Income growth also slowed in November, rising just 0.3 percent after a hefty 0.6 per cent increase a month earlier.
Both the income and spending increases were in line with Wall Street economists' predictions. On the positive side, the personal savings rate increased to 0.3 percent in November - meaning that Americans were setting aside 0.3 cent out of each dollar - after growing a slim 0.1 per cent in October.
The biggest drop in spending last month occurred for costly durable goods, which plunged 27.3 per cent, the biggest decline since a 44.1 per cent fall in June, after growing 8.2 per cent in October.
The department said a more sluggish pace of new-car buying accounted for the slowdown in spending last month. The department's price index for consumer spending - an inflation gauge that the Federal Reserve monitors closely - barely rose by 0.1 per cent after a 0.4 per cent surge in October.