US consumer spending in November up by most in 3 months

Shoppers at a Walmart store in Secaucus, New Jersey on Nov 11, 2015.
Shoppers at a Walmart store in Secaucus, New Jersey on Nov 11, 2015. PHOTO: REUTERS

WASHINGTON (BLOOMBERG) - Consumer purchases climbed in November by the most in three months, indicating the biggest part of the US economy was gaining momentum heading into the holiday shopping season.

Spending advanced 0.3 per cent, matching the median forecast in a Bloomberg survey, to US$12.43 trillion at an annualized rate, a Commerce Department report showed on Tuesday (Dec 22). That followed no change the prior month.

The figure, which was to be made public on Wednesday with the agency's report on personal income and spending, was released early on the Bureau of Economic Analysis' website. The only number issued ahead of time was the current value of household outlays. Other data typically contained in the report, including changes in incomes, inflation-adjusted spending and the saving rate, will be issued as scheduled on Wednesday.

"There has been an inadvertent release of some of BEA's personal consumption expenditure data for November as well as for previous months," agency spokeswomen Jeannine Aversa, said in an emailed statement. "BEA will take steps to ensure that this does not happen again and will take all appropriate action to safeguard economic data."

Household expenditures, which account for almost 70 per cent of the US economy, are being powered by steady hiring, cheap gasoline, and rising home equity that also lifted US growth last quarter. In addition to sustained purchases of large-ticket items such as cars, sales at retailers are being spurred by discounts on holiday gifts.

"The numbers are a little bit stronger, and supportive of at least 2 per cent growth in the fourth quarter," said Mike Englund, chief economist at Action Economics. "It should also be supportive of the first quarter. We should get a nice bounce, but with a lag as lower gasoline prices allow households to spend more money on other goods."

Estimates in the Bloomberg survey of 77 economists for consumer spending, before adjusting for changes in prices, ranged from no change to a 0.5 per cent increase.

The inadvertent release of the data "is probably a little embarrassing" for the BEA, said Englund. Still, they normally "do a great job with the website."