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December 24, 2009

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Home » Business » Economy

US personal incomes rise to boost spending

PERSONAL incomes in the United States rose in November at the fastest pace in six months while spending posted a second straight increase, raising hopes that the recovery from America's deep recession might be gaining momentum.

The US Commerce Department yesterday said personal incomes rose 0.4 percent in November, helped by a US$16.1-billion increase in wages and salaries, reflecting the drop in unemployment that occurred last month.

The gain in incomes helped bolster spending, which rose 0.5 percent in November. Both the income and spending gains were slightly less than economists had expected.

After taking inflation into account, after-tax incomes are rising at an annual rate of just 1.2 percent, a pace that many economists believe is too weak to support a strong economic rebound, especially at a time when many households are struggling with high debt loads and trying to rebuild savings that were depleted during last year's stock market plunge.

Consumer spending is closely watched because it accounts for 70 percent of economic activity.


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