Americans earn more - but save less

NEW YORK (CNNMoney.com) -- Just in time for the holiday shopping season: Americans earned and spent more money in November than they did during the previous month. They also saved less.

Personal income rose 0.3% in November, following a downwardly revised 0.4% increase in October, according to data released Thursday by the Commerce Department. Spending by individuals ticked up 0.4%, compared to an upwardly revised 0.7% spike the prior month.

Income was expected to increase by 0.2% in the month, according to a consensus estimate of economists from Briefing.com. The economists expected that spending by individuals would rise 0.5% in November.

"This report is another indication that consumer spending is firming as we finish out the year," said Tim Quinlan, economic analyst at Wells Fargo. Consumer spending accounts for about two-thirds of the nation's economic activity, so signs of improvement bode well for the recovery.

Private sector wage and salaries were also up, increasing by $6.6 billion last month. But the increase wasn't as large as it was in October, when salaries jumped $31.2 billion.

While earnings and spending increased, the data showed that Americans did not save as much money in November as they did the prior month.

Americans saved $614.8 billion in November, compared with $622.8 billion the prior month. And personal savings as a percentage of disposable income slipped to 5.3% from 5.4% in October.

"The figures are seasonally adjusted, but the modest decline in the savings rate could be showing that the holiday shopping season will be much better than what we have seen over the last sever years," Quinlan said.

Quinlan's forecast calls for a 5% increase in holiday sales compared to last year, which would be the best year-over-year improvement since 2005, he said.