US consumer confidence is rated high in new figures Photograph: Daniel Barry/EPA
US consumer sentiment hit a five-month high heading into the end of the year and spending has notched up its strongest month since the summer, in the latest signs of sustained vigour in the world's largest economy.
Consumer spending rose in November at the fastest pace since June and an upbeat sentiment reading for December suggests consumers will keep shopping despite tepid income growth.
"Next year is shaping up to be the better tomorrow we have wanted to see ever since the recession ended almost five years ago," said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ in New York.
Consumer spending rose 0.5% after gaining 0.4% in October, the US commerce department said on Monday. The rise matched economists' expectations and was the seventh consecutive monthly increase. When adjusted for inflation, consumer spending, which accounts for more than two-thirds of US economic activity, also increased 0.5%, the highest since February 2012. The data indicates that spending in the last three months of 2013 will almost certainly accelerate from the third quarter's 2% annual rate, despite signs that last-minute Christmas sales may have been disappointing.
The US economy grew at an annualised rate of 4.1% in the third quarter of 2013, the fastest pace in nearly two years, after expanding at a rate of 2.5% in the second quarter. The International Monetary Fund has said that it will raise its 2014 growth forecast for the US. having predicted growth of 2.6% only two months ago.
