The U.S. Department of Commerce’s Bureau of Economic Analysis (BEA) has released its report on personal income and spending for the month of November. Both indexes posted gains, but spending has so far outpaced income.

Personal income increased by $54.0 billion in November, a rise of 0.3%. Dow Jones had called for a gain of 0.4%. Disposable personal income increased by $50.9 billion, for a gain of 0.4%. According to the BEA, the increase in personal income in November was based on gains in wages, salaries and personal interest income.

The BEA reported that outlays, what the rest of us call personal spending, increased by $87.1 billion, or up 0.6%. Dow Jones was calling for a 0.4% gain in spending.

There was a $49.1 billion increase in real personal consumption expenditures (PCE) in November, broken down as a gain of $22.3 billion in spending for goods and a $27.6 billion more in services. The spending gains in goods were led by recreational goods and vehicles, and the gains in spending on services were attributed to electricity and gas.

It is not that unusual to see income lag spending, although personal income has been on the rise in 2017. And for the report showing a higher spending than income would lead one to believe that consumers are spending up and using their credit cards for the holidays.

While spending outpaced income, the personal savings was $426.2 billion in November and the personal saving rate (savings as a percentage of disposable personal income) was 2.9%. Maybe those stock market gains and slightly higher interest rates are enticing people to invest more after all.

The BEA further reported:

Real DPI increased 0.1 percent in November and Real PCE increased 0.4 percent. The PCE price index increased 0.2 percent. Excluding food and energy, the PCE price index increased 0.1 percent.

Remember that close to two-thirds of gross domestic product (GDP) is tied to consumption and spending in the United States.

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