Consumer spending rose 1.1% in November 2007, above the 0.9% estimate. Spending on durable goods -- such as autos, furniture and appliances -- increased 0.6%, after a 0.1% decline in October 2007. Non-durable goods spending also rose 0.6%, and services spending gained 0.5%.
The higher spending reduced the nation's personal savings rate, which declined to -$48.4 billion, or -0.5% of disposable income. Also, core inflation increased 0.2% in November, below the 0.3% estimate, but the 12-month gain of 2.2% remains above the U.S. Federal Reserve's stated target zone of 1-2%.
Spotlight on savings
"The negative savings rate, or no savings by the nation, is the most concerning statistic," economist Steve Affinito told BloggingStocks Friday. "While the economy is getting a boost from consumer spending, spending that outstrips income is not sustainable, long-term. I know it's not the cheeriest message during the holidays, but Americans need to save more over the long haul."
The 0.6% rise increase in durable goods spending took many economists and analysts by a surprise, as the housing sector's slump was expected to create a slump in those long-lasting items, such as appliances - - that go in homes. So far, that pronounced downward trend has not occurred.
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