Consumer spending drops 0.4%

WASHINGTON – U.S. consumer spending fell 0.4% in November, the first decline since April, as Americans confronted a newly resurgent virus.

The decline followed a 0.3% gain in October and even bigger increases starting in May, the Commerce Department reported Wednesday, a period when the country was emerging from lockdowns intended to slow the spread of COVID-19.

There was a massive 12.7% decline because of that in April.

Also, personal incomes fell 1.1% in November, marking the third drop in the past four months as various government relief programs expire.

Inflation as measured by a gauge preferred by the Federal Reserve showed a modest 1.1% gain in November, well below the Fed’s 2% target. The benign inflation readings will give the Fed leeway to continue providing support to an economy that has absorbed millions of people who suddenly unemployed as businesses shut down or lay off workers.

Factory orders rose in November

WASHINGTON – Orders to U.S. factories for big-ticket manufactured goods rose a moderate 0.9% in November with a key category that tracks business investment plans showing a gain.

The November gain in orders for durable goods, items expected to last at least three years, followed stronger gains in recent months including a 3.8% rise in October, the Commerce Department said Wednesday.

A key category that serves as a proxy for business investment spending rose a modest 0.4% in November following much stronger gains of 3.6% in October and 3.9% in September.

Analysts are concerned that business investment could begin to fade if the resurgence of the coronavirus curtails demand.

From wire reports