By Jeannine Aversa, AP Economics Writer
WASHINGTON (AP) — Americans spent at a moderate pace last month, giving the economy a boost ahead of the holidays.
The Commerce Department reported recently that consumers increased their spending 0.4 percent in November. The gain came after shoppers ratcheted up spending by 0.7 percent in October, the most since August 2009.
Even with the latest increases, consumers are still reluctant to go on the type of buying binges needed to dramatically lower the 9.8 percent unemployment rate.
Consumers' incomes grew 0.3 percent last month, lifted by gains from fatter stock portfolios. Wages and salaries, however, barely budged. Hiring slowed to a crawl in November and paychecks got thinner.
By contrast, incomes increased 0.4 percent in October, reflecting stronger wage gains from a better hiring climate that month. Income growth is the fuel for future spending.
Looking ahead, economists foresee scant wage gains because the job market is only slowly healing. That's one of the forces that will keep a lid on the type of lavish consumer spending needed to make a big impact on the unemployment rate.Nonetheless, consumers in the final months of this year have been spending more freely, and that's helping to invigorate an economy that has been stuck in a slow-growth rut.
Shoppers are spending more as stock portfolios grow, loans become a bit easier to obtain and massive layoffs have moderated. Discounts have also given shoppers more incentive to spend ahead of the holidays.