Consumer spending ticked higher in November, according to government data released Friday, marking the fifth consecutive month of gains but disappointing some economists who had hoped that momentum in holiday shopping would lead to a merrier month.
The holiday season is critical for the retail industry as well as the broader economy, with roughly two-thirds of the nation’s gross domestic product driven by consumer spending. Robust spending in the fall coupled with retailers’ reports of long lines and ringing cash registers on Black Friday, the traditional kickoff to the holiday shopping season, had fueled expectations for a brighter November. Analysts had expected a 0.3 percent increase in spending last month; consumers delivered a 0.1 percent blip.
The middling results mirror retailers’ reports this month that shoppers laid in wait for bargains on Black Friday and kept their wallets in their pockets for the rest of November. The trend seems to have continued in December; traffic at the nation’s largest chain stores dropped during the first two weeks of the month before picking up last week.
Michael P. Niemira, chief economist of the International Council of Shopping Centers, which tracks retail sales, said he expected last-minute shoppers to turn out in force this week. The fact that Christmas falls on a Sunday — giving consumers a full weekend day to hunt for presents — should provide a window for procrastinators.
“Consumers are still behind in their holiday gift completion rate relative to last year, which means the final week before Christmas is likely to be very, very busy,” Niemira said.
It remains unclear where shoppers will find the firepower to fund any holiday splurge.
The data released Friday showed that disposable income — the money households have left over after taxes — remained unchanged in November. The savings rate, which had hovered around 5 percent for the first half of the year, fell back to 3.5 percent.
Meanwhile, personal income rose just 0.1 percent as wages and salaries fell by $7.1 billion in November. The weak reading came despite a significant drop in the jobless rate last month that, on the surface, would seem to have boosted household incomes.
But economists said the decline in unemployment was the result not only of people finding work but also of Americans dropping out of the labor force. The two data points are calculated from different government surveys that occasionally provide divergent snapshots of the economy. In addition, analysts pointed to an upward revision of October’s income gain to 0.4 percent, resulting in a decent two-month average.
Brian Bethune, economics professor at Amherst College, said that he sees “flickers of improvement” in recent data and that the numbers are at least trending in a positive direction, even if the gains are not as big as many economists would like.
“It’s a very low-frequency type of improvement,” Bethune said. “Nothing that’s going to get you up doing the disco dance, but you might start thinking of it.”
Meanwhile, businesses ratcheted up spending on equipment in November by 3.8 percent, driven by a 73 percent jump in aircraft purchases.
Though the increase was well above expectations, economists noted that, excluding airplanes and defense spending, capital orders actually dropped 1.2 percent. They attributed the decline to the expiration at the end of this year of a capital spending tax deduction that was part of President Obama’s economic stimulus plan.