Spending by consumers went up quickly enough in November to point to a pretty good start to the holiday shopping season, but not quickly enough to show that the U.S. economy is growing even faster than it already is.
Last month, spending by households went up by a healthy 0.4%. People in the US bought more cars after auto stores increased incentives to get rid of their extra stock. They also spent more on entertainment and gadgets.
The Wall Street Journal asked economists and found that they thought spending would go up by 0.5%.
Consumer spending, which is what keeps the economy going, has led to two quarters of 3% growth in a row, and the last three months of the year look like they will be pretty strong too.
The incomes went up by 0.3% last month.
Rising wages adjusted for inflation, low unemployment, and, until recently, a rising stock market that helped wealthy families a lot have all led to more spending.
Another economist at Nationwide, Oren Klachkin, wrote in a note to clients, “We can take a break for the holidays knowing that the economy’s growth engine is running smoothly.”
A big boost is not expected to come from interest rates falling very quickly.
The Federal Reserve hinted on Wednesday that it will lower interest rates on loans less sharply next year because inflation is still too high. If rates go down, inflation could rise even more.
The savings rate, on the other hand, went down from 4.5% to 4.4%. Even though it’s a little smaller than usual, people’s savings seem to be high enough to keep them spending.
Before the market opened on Friday, U.S. stocks DJIA SPX were expected to go down.
