Published: 08:37 EST, 22 December 2017 | Updated: 08:37 EST, 22 December 2017
WASHINGTON (AP) – American consumers stepped up their spending last month, a good sign for the holiday shopping season.
The Commerce Department says consumer spending rose a sharp 0.6 percent from October, outpacing a 0.3 percent increase in personal income. As a result, the savings rate fell to 2.9 percent of after-tax income in November, lowest since November 2007.
The numbers bode well for the holidays and for the overall economy: Consumer spending accounts for about 70 percent of U.S. economic output.
In this Wednesday, Sept. 13, 2017, photo, shoppers enter Nordstrom's flagship store in downtown Seattle. On Friday, Dec. 22, 2017, the Commerce Department issues its November report on consumer spending, which accounts for roughly 70 percent of U.S. economic activity. (AP Photo/Ted S. Warren)
The measure of inflation favored by the Federal Reserve remained subdued, rising 1.8 percent in November from a year ago. Inflation is running below the Fed's 2 percent annual target, but the central bank is still confident enough in the economy to have raised interest rates three times this year.
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