While income growth slowed in November, consumer spending was still strong heading into the holiday shopping season

As in recent months, core inflation is quite soft and still below the Fed's target range. Personal income in November rose 0.3%, following a 0.4% boost in October. The market consensus had called for a 0.2% improvement. However, the wages & salaries component was sluggish, edging up 0.1% after jumping 0.5% in October.

The consumer continued to open up his wallet as in recent months. Personal consumption expenditures advanced 0.4%, following a 0.0.7% gain in October. For the latest month, strength was led by a 0.7% monthly surge in nondurables. Only about 0.2%age points was price related. Durables slipped back 0.1% while services increased 0.4%.

Chain-dollar PCEs rose 0.3% in November, following a 0.5% boost the month before, suggesting healthy PCEs growth for the fourth quarter.

Year on year, personal income for November posted a 3.8% gain, compared to 3.9% in October. PCEs growth edged up to 3.8% in from 3.7% in October.

On the inflation front, the PCE price index increased 0.1% in November, following a 0.2% rise the month before. The core rate nudged up 0.1% after no change in October. On a year-ago basis, the headline number in November was up 1.0% while the core was 0.8%.

While personal income growth has oscillated somewhat, consumers appear to be relatively confident about the economy as spending has been on a more stable uptrend. This is good news for fourth quarter growth and for moving forward.


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