Consumer spending, durable orders rise in Nov.

WASHINGTON -- Two economic reports delivered welcome news Friday as the government reported that consumers spent and earned more in November, and durable goods orders rose in November.

The Commerce Department said consumer spending rose 0.4% compared with October. Personal income jumped 0.6%, the biggest gain in 11 months.

Wages and salaries rose $41.1 billion in November. Sandy had reduced wages at an annual rate of $18.2 billion in October. Spending had fallen 0.1% in October compared with September.

With income rising faster than spending, the saving rate rose to 3.6% of income in November, up from 3.4% in October.

Economists remain concerned that income growth is too weak to support sustained increases in spending, especially at a time when Americans are worried about possible tax increases in the new year.

The second report said companies increased their orders for long-lasting manufactured goods in November, with a second consecutive monthly gain in a key category that reflects business investment plans.

The Commerce Department said orders for durable goods rose a seasonally adjusted 0.7% in November from October, when orders rose 1.1%.

Orders for core capital goods - considered a proxy for business investment - were up 2.7% in November after a revised 3.2% gain in October, which was the biggest increase in 10 months.

The two big gains came after a period of weakness in this category had raised concerns about flagging business investment, a driving force in this recovery.

The gains were widespread in November, with only demand for commercial aircraft showing a big decline.

Associated Press