In its report on personal income and spending for November, the U.S. Bureau of Economic Analysis data show that personal income in current dollars grew by 0.2% month over month and personal spending (called “personal consumption expenditures” or PCE) rose by 0.5%. Real disposable personal income rose 0.1% in November and real PCE also rose 0.5%. “Real” figures are given in chained 2005 dollars.

Consensus estimates had called for month-over-month growth of 0.5% in personal income and 0.5% in spending.

October’s report was the first since January that showed a decline in personal income, so this new report returns to the growth pattern we have seen most of the year. Monthly growth in wages and salaries rose to $26.1 billion in November, compared with growth of just $9.9 billion in October, but that was still far less than economists expected.

Purchases of cars and auto parts accounted for more than half the gain in November PCE, while purchases of nondurable goods rose less than 0.1%, compared with a rise of 0.8% in October.

Personal saving fell month over month in November, from $571.8 billion in October to $525.4 billion, a savings rate of 4.2% compared with 4.5% in the prior month.

The price index for PCE rose less than 0.1% in November, equal to the consensus estimate and more than the 0.1% decrease in October. Excluding food and energy, the PCE price index also increased 0.1%, equal to the October increase.

Consumer spending picked up again in November and inflation remains nearly invisible. The Fed’s decision to cut back on its asset buying was based, at least in part, on its belief that the U.S. economy is strengthening enough to support job growth on its own. Monday’s Census Bureau report appears to back up that belief, but Americans can only buy so many cars and refrigerators.

Consumption of nondurable goods like clothing needs a boost, and the holiday shopping season ought to provide a lift to department stores. Unfortunately, as we have noted before, smartphones, tablets and game controllers have been the hot sellers for this year, and that does not bode well for department stores that depend on apparel sales for a significant share of their revenues.

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