U.S. incomes rise fastest in 6 months
Strength of recovery still in question
Last Updated: Wednesday, December 23, 2009 | 11:49 AM ET
CBC News
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Personal incomes rose in November at the fastest pace in six months, the U.S. Commerce Department reported Wednesday.
It also released data showing consumer spending gained for a second straight month.
Some economists doubt the increase in U.S. incomes is enough to support a strong rebound. (Paul Moseley/Associated Press) Personal incomes were up 0.4 per cent in November, helped by a $16.1- billion increase in wages and salaries, as unemployment fell. Spending increased 0.5 per cent in November.
After taking inflation into account, after-tax incomes are now rising at an annual rate of just 1.2 per cent. Some economists doubt that is enough to support a strong economic rebound, especially at a time when many households have high debt.
"Annualized income growth of a little over one per cent will not be enough to drive a significant recovery in consumption at the same time that debt needs to be paid down," said Paul Dales, U.S. economist at Capital Economics.
Consumer spending is closely watched in the U.S. because it accounts for 70 per cent of economic activity.
With files from The Associated PressShare Tools
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