Consumers opened up their wallets in November, adding to the sense that the economy is gaining momentum heading into the New Year.
The stock market rose again this morning after the U.S. Commerce Department reported that consumer spending increased by a seasonally adjusted 0.5 percent in November, its fastest pace since June.
The November increase followed a 0.4-percent gain in spending in October.
“These are the two strongest monthly readings in spending in over a year,” Michael Gapen, an economist at Barclays, told MarketWatch.com.
Personal income rose 0.2 percent in November after a 0.1-pecent decline in the prior month.
Sal Guatieri, senior economist at BMO Capital Markets, said a 0.5-percent gain in spending in November would push consumption for the fourth quarter to a 3.2-percent rate. That would be the fastest quarterly rate since 2010 and a signal that U.S. growth in 2014 could be the best in years, Guatieri said.
The Commerce Department also reported today that personal income increased $30.1 billion, or 0.2 percent, and disposable personal income (DPI) increased $16.2 billion, or 0.1 percent, in November according to the Bureau of Economic Analysis.
Today’s promising data prompted the Dow Jones Industrial Average to surge again, rising by more than 75 points this morning.
The largest local gainers this morning were Quad/Graphics Inc. (up 74 cents to $26.90) and Kohl’s Corp. (up 49 cents to $50.80).