The report found that consumers are tempering increased spending by keeping it close to the percentage by which their income is rising and also by putting some money aside, reports Retailer Daily.
US consumers’ personal consumption expenditures (PCE), which essentially reflect consumer spending, increased $45.7 billion, or 0.5%, for the month. PCE increased $61.3 billion, or 0.6%, in October. In contrast, PCE dropped $60.3 billion, or 0.6%, in September, and increased $139.8 billion, or 1.34%, in August.
The November spending increase only slightly outpaced consumers’ personal income, which rose $49.7 billion, or 0.4%, and matched disposable personal income (DPI), which rose $54.1 billion, or 0.5%. DPI represents personal income less current personal taxes. In contrast, consumers were more spend-happy in October, when personal income only increased $30.1 billion, or 0.2%, and DPI rose $45.7 billion, or 0.4%.
Personal saving, which has undergone some radical monthly shifts since June 2009, increased 1.6% in November, growing from $516.7 billion to $525.1 billion. Earlier this year, personal saving experienced severe declines of 34.5% in August, 10.4% in July and 26.3% in June; but dramatically reversed course in September, increasing 15.8%. However, in October consumers needed to support their increased spending and decreased saving by a relatively moderate 3.9%.
November Retail Sales Improve
A comparison with the November Advance Monthly Retail Trade Survey from the US Census Bureau shows that US retail and food service sales rose 1.3%, from $347.5 billion to $352.1 billion. US retail and food service sales have been in a seesaw pattern in recent months, with sales falling 1.5% in September and 0.2% in July, but rising 2.7% in August and 1.4% in October.
Holidays May Produce Higher December Spending Levels
Recent holiday spending numbers suggest that December may produce substantial increases in consumer spending, possibly beyond income increases and at the expense of personal saving. Currently, the International Council of Shopping Centers (ICSC) is predicting that chain store retailers’ overall comparable store sales will increase about 2% on a year-over-year basis during December 2009.
In addition, digital market research firm comScore reports that the final shopping weekend of the season, December 19-20, 2009, featured a strong 13% growth rate as online sales rose from $677 million during the final weekend before Christmas 2008 to $767 million. Snowstorms on the eastern seaboard prompted many consumers to finish their holiday shopping from the confines of their own homes. The full week ending December 20, 2009 posted a year-over-year growth rate of 6% as it grew from $4.5 billion to a one-week sales record of roughly $4.8 billion in online spending.