U.S. Consumer Spending Rises in November, Core PCE Mild; Fed Expected to Hold Rates

U.S. consumer spending grew steadily in November 2025, with real personal consumption expenditures rising 0.3% month-over-month, matching October’s pace and supporting economic momentum ahead of the holiday season. The core Personal Consumption Expenditures (PCE) price index rose 0.2% monthly and 2.8% annually, slightly below September’s 2.9%, signaling inflation remains moderate and showing no clear evidence of tariff-driven price pressures. The Bureau of Economic Analysis released delayed October and November data on January 22, 2026, due to a federal government shutdown. Nominal spending increased 0.5% in both months, consistent with expectations. Goods spending posted its largest gain since July 2025, driven by autos, apparel, and gasoline, while services growth slowed. Real disposable income showed minimal growth, and savings rates fell to 3.5%, the lowest since October 2022, indicating consumers are drawing down savings. Wage growth decelerated, with private-sector pay rising 4.1% year-over-year—the slowest since June 2025. Market participants expect the Federal Reserve to hold rates steady at its February meeting amid resilient demand, stable labor markets, and subdued inflation.