U.S. consumer spending jumped higher than economists predicted in November, signs of a reviving U.S. economy that should give the central bank enough confidence to increase interest rates a bit more in 2018.
The Commerce Department release figures on Friday that showed purchases rose 0.6 percent. Experts had only predicted a 5 percent increase. Meanwhile, incomes also rose 0.3 percent. Though a bit under projections, the speed at which incomes are increasing in the U.S. is accelerating (they haven’t increased this fast since the start of this year).
Consumer spending accounts for 70 percent of the U.S. economy, and these increases are a strong indication that this part of the economy is getting stronger. Now that President Trump’s proposed tax legislation is now law, the economy could revive even more.
Personal spending by consumers is being made possible because personal incomes also grew in November according to reports by the Commerce Department. This suggests that households are better equipped to spend more money on purchases that fuel the economy, at least in the short-run.