Consumer Spending Rises as US Incomes Increase

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For a fifth straight month, personal incomes have risen which has fueled an increase in consumer spending. This news is yet another indicator that the worst of the recession may be behind us. However, these gains are seen to be heavily dependent on stimulus programs and our economy still remains very weak. Overall, personal incomes rose by 0.4 percent in November, according to the US Commerce Dept.

That rise in personal income fueled the gain in consumer spending, which rose 0.5 percent from October.

This news comes at the same time as a survey released by the University of Michigan and Reuters shows that consumer confidence has risen this December.

Even though there has been a lot of positive press about a rebounding economy; this should be tempered with that fact much of these gains are directly tied to government stimulus programs and that these gains are smaller when you take inflation into account.

Regardless of a few setbacks, consumers are sensing that the economy is picking up and are beginning to spend money again.