WASHINGTON — Americans increased their spending in November by the most in five months, and their income edged up modestly.
Consumer spending rose 0.5 percent from October, when spending had risen 0.4 percent, the Commerce Department said Monday. It was the best showing since June. The gain was driven by a jump in spending on long-lasting durable goods such as autos.
Consumers' income rose 0.2 percent, an improvement from a 0.1 percent decline in October. Wages and salaries, the most important component of income, rose a solid 0.4 percent. That gain reflected strength in the private sector and a modest gain in government pay.
Steady hiring and modest wage gains have boosted consumer confidence and given Americans more money to spend. At the same time, higher stock and home prices have driven up household wealth and made some people more comfortable about spending.
The big rise in spending and smaller income gain meant that the personal saving rate slipped a bit to 4.2 percent of after-tax income in November from 4.5 percent in October.
The economy, as measured by the gross domestic product, grew at an annual rate of 4.1 percent in the July-September quarter, the government said Friday, the best growth rate in nearly three years.
"Consumers are spending at the fastest rate this quarter than any time since 2010," said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi. "With numbers like these, tomorrow is shaping up to be the better tomorrow we have wanted to see ever since the recession ended almost five years ago."
President Barack Obama took note last week of the encouraging reports, including four straight months of solid job gains. That spurt of hiring has helped lower the unemployment rate to 7 percent, a five-year low.
A stronger outlook for the economy and job market led the Fed last week to begin winding down its bond-buying program. The Fed said that it would begin reducing its $85 billion-a-month in bond purchases by $10 billion in January.