Holiday Spending Rose in November Despite High Prices, Commerce Department Says

Consumer spending remained resilient heading into the holiday shopping season, even as inflation stayed higher than normal and income growth showed signs of slowing.

According to new data from the US Commerce Department, consumer spending rose by 0.5 percent in November as shoppers increased purchases ahead of the holidays. The report suggests many consumers continued to spend despite elevated prices across a wide range of goods and services.

At the same time, income growth lagged behind spending. The report shows personal income increased by just 0.3 percent in November, highlighting a growing gap between how much consumers are earning and how much they are spending.

Inflation also remained a concern. The Personal Consumption Expenditures Price Index, which is the Federal Reserve’s preferred measure of inflation, rose 0.2 percent on a monthly basis. That pushed the annual inflation rate to 2.8 percent, unchanged from September.

Economists closely watch the PCE index because it helps guide decisions on interest rates. While inflation has cooled from its peak in recent years, it remains above the Federal Reserve’s long-term target, keeping pressure on policymakers as they weigh future rate moves.

The Commerce Department report was released later than usual due to the federal government shutdown, which lasted throughout October and into the first half of November.

The data provides an early snapshot of consumer behavior heading into the holiday season, suggesting shoppers were willing to continue spending despite financial headwinds tied to inflation and modest income growth.

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