Consumer Spending Surged 0.1% In November
U. S. consumer spending was tepid in November and a gauge of business investment fell for a second straight month, suggesting the economy lost some of its recent momentum. Some analysts trimmed fourth-quarter growth forecasts after the weak consumption and factory data on Friday. But many still expected output to expand at an annual pace of more than 3 percent, faster than the 1.8 percent in the July-September period. Consumer spending ticked up 0.1 percent last month, the Commerce Department said, after rising by the same margin in October. Economists had expected spending, which accounts for two-thirds of U. S. economic activity, to rise 0.3 percent. When adjusted for inflation, spending rose 0.2 percent last month after a similar gain in October. Shipments of these so-called core capital goods, which go into calculations of U. S. gross domestic product, dropped for a third straight month. This suggests that business spending, which has been robust since the start of the recovery in mid-2009, could slow considerably from the third-quarter's 15.7 growth percent pace. The ability of U. S. consumers to keep on spending while incomes remain weak is also a potential drag on growth in early 2012.