WASHINGTON (Reuters) - U.S. consumers cut spending for a fifth straight month during November and their incomes shrank, according to a government report on Wednesday that pointed to deepening recessionary pressures.
The Commerce Department said spending contracted by 0.6 percent after falling even more steeply by 1 percent in October. Incomes contracted by 0.2 percent after a slight 0.1 percent gain in October, reflecting the strain that rising unemployment is putting on Americans’ ability to spend.
Wall Street economists surveyed by Reuters had expected an even steeper 0.7 percent fall in spending last month but had forecast that incomes would be flat rather than that they would shrink.
Personal savings edged up in November to 2.8 percent of disposable income from 2.4 percent in October, still a low level but a possible sign that the year-old recession is causing wary consumers to put more into bank accounts rather than spending it.
Reporting by Glenn Somerville, editing by Walker Simon