Money Matters - Simplified

Consumer spending up on wage increases

Washington -- Consumer spending rose 0.5 percent in November, pushed by an increase in incomes, the U.S. Commerce Department said Wednesday.

Disposable incomes rose 0.5 percent, while incomes increased by $49.7 billion, or 0.4 percent, prompting the fourth increase in spending in the past five months.

In October, spending rose 0.3 percent, while disposable incomes rose 0.5 percent.

Consumer spending accounts for about 70 percent of the gross domestic product, which makes the figure a key measurement of how the economy is doing. Although both income and spending figures rose less than expected, incomes rose faster than they have for six months, the Bureau of Economic Analysis said.

In May incomes rose 1.5 percent, but the figure was propped up by increased government spending, compliments of the American Recovery and Reinvestment Act.

In November, wages from private firms rose by $16.1 billion, with manufacturing payrolls increasing $1.6 billion. Payrolls for service producing jobs rose by $15.7 billion during the month. Government wages rose by $1.7 billion.

Copyright 2009 by United Press International.

No votes yet