Americans’ personal incomes shot up 0.8 percent in November, but spending rose only half as much and analysts say it remained restrained as the holiday shopping season ended.
Incomes totaled $7.03 trillion at a seasonally adjusted annual rate, up from $6.97 trillion in October, the Commerce Department said Wednesday.
It was the biggest jump since incomes rose 1 percent in June 1996 and was slightly better than the 0.7 percent gain analysts had expected.
The 0.4 percent increase in spending, to a $5.59 trillion rate, was less than the 0.5 percent economics had predicted, but it was in line with reports of weak holiday shopping.
Many analysts believe consumer spending will remain moderate during 1998, but still act as an economic stimulus. Spending represents about two-thirds of the nation’s economic activity.
A separate report from the Labor Department suggested the labor market remains tight in December. It said new claims for unemployment benefits fell by 13,000 last week to 307,000. Many analysts had expected only a 1,000 drop.