Consumer spending drops 0.4%

U.S. consumer WASHINGTON — spending fell 0.4% in November, the first decline since April, as Americans confronted a newly resurgent virus.

The decline followed a 0.3% gain in October and even bigger increases starting in May, the CommerceDepartment reported Wednesday, a period when the countrywas emerging fromlockdownsintended to halt the spread of COVID-19. There was a massive 12.7% decline because of that in April.

Also, personal incomes fell 1.1% in November, marking the third drop in the past four months as various government relief programs expire.

Inflation asmeasuredbya gauge preferred by the Federal Reserve showed a modest 1.1% gain in November, well below the Fed’s 2% target. The benign inflation readings will give the Fed leeway to continue providing support to an economy that has absorbed millions of people who became unemployed as businesses shut down or lay off workers.

Economists, however, fear that weak spending by Americans will sloweconomic growth in coming months. Congress passed a $900 billion pandemic rescue package Monday, but President Donald Trump attacked the measure the following day as insufficient with direct payments to Americans.

Consumer spending accounts for around 70% of economic activity so even small declines can weigh heavily on economic growth.

It is unknown if Trump will sign the measure, which as been fought over for months, as his presidency expires.