December 24, 2008

Income, spending and prices fall in month

U.S. personal income and disposable funds decreased in November, the U.S. Commerce Department said Wednesday.

Personal income decreased 0.2 percent, or $20.7 billion, while disposable income fell 0.1 percent, or $11.8 billion, the Commerce Department said.

While wages and salaries fell $8.7 billion, consumer spending fell 0.6 percent after a 1-percent decline in October.

Prices also fell. In November prices fell by 1.1 percent following a decline of 0.5 percent in October. Core inflation, excluding food and energy costs, was essentially unchanged in the month, the department said.

While consumers pull back from spending -- and have less to spend -- savings have gone up in total and as a percentage of disposable income.

Personal savings grew from $252.3 billion in October to $298 billion in November. In contrast, personal outlays shrank by $57.4 billion in the month.

As a percentage of disposable income, savings grew to 2.8 percent in November from 2.4 percent a month ago.