Consumer spending rises most in three years

Consumer spending rose in November by the most in three years as incomes climbed, suggesting fourth-quarter economic growth might be stronger than currently expected.

The Commerce Department said on Friday inflation-adjusted consumer spending rose 0.6 percent, and after-tax income climbed 0.8 percent when adjusting for inflation.

The department gave no indication Superstorm Sandy, which slammed the East Coast in late October and kept many people out of work for weeks, had impacted the data or its collection in November.

Spending before taking into account changes in prices rose 0.4 percent. Economists polled by Reuters had expected nominal consumer spending would rise 0.3 percent last month.

The rise in real spending was the largest increase since August 2009 and suggested purchases by consumers were not taking the hit many expected due to growing fears the economy could slip into recession next year.

Most economists think economic growth will slow in the fourth quarter from the 3.1 percent pace of growth clocked in the prior three months, but Friday's data points to consumers offsetting some of the drag expected from an expected decline in the pace at which companies restock their shelves.

Prices fell 0.2 percent last month and were up 1.4 percent in the 12 months through November, the Commerce Department said.

(Reporting by Jason Lange; Editing by Andrea Ricci)