Resilient Consumer Spending Boosts Economic Growth, Inflation Softens Slightly in US
Updated: Dec 24, 2024
USA: Consumer spending in the U.S. grew by 0.4% in November, supported by robust demand across goods and services, reflecting the economy's resilience despite persistent inflation. This growth followed a revised 0.3% increase in October, with notable spending on new motor vehicles, recreation goods, healthcare, and financial services. Adjusted for inflation, real consumer spending rose 0.3%, setting a 3.1% annualized growth rate for the fourth quarter.
Labour market strength, highlighted by low layoffs and strong wage growth, underpinned spending. Personal income rose 0.3%, with wages increasing by 0.6%. However, lower-income households continued to face financial pressures, as disposable income after inflation grew only 0.2%, leading to a slight dip in the saving rate to 4.4%.
Inflation showed moderate progress, with the PCE price index rising 0.1% in November after a 0.2% gain in October. Core inflation, excluding food and energy, posted its smallest increase in six months, at 0.1%, but remained elevated at an annual rate of 2.8%. Housing inflation eased, reflecting slower rent increases, while food and accommodation costs rose significantly.
Source: Reuters