Consumer spending rose in November by the most in five months as Americans took advantage of store discounts during the year-end shopping season, giving the world’s largest economy a lift.

Household purchases, which account for almost 70 percent of the economy, rose 0.5 percent after a 0.4 percent gain in October that was larger than previously estimated, the Commerce Department reported today in Washington. The median forecast of 76 economists in a Bloomberg survey called for a 0.5 percent rise. Incomes climbed less than forecast, reflecting a slump in earnings by farmers.

The report follows data last week that showed stronger momentum in economic growth as households stepped up spending. While some retailers have been discounting, an improved labor market and buoyancy in housing and stocks has lifted sales of cars, furniture, appliances and other durable goods.

“Jobs are growing, confidence is growing, households and asset values are climbing,” said Paul Edelstein, director of financial economics at IHS Inc. in Lexington, Massachusetts. “There appears to be some sort of gathering momentum in the economy.”

Stock-index futures held earlier gains after the report. The contract on the Standard & Poor’s 500 Index maturing in March rose 0.5 percent to 1,823.3 at 8:50 a.m. in New York.

Survey Results

Projections for spending ranged from gains of 0.2 percent to 0.7 percent. October’s reading previously was reported as an increase of 0.3 percent.

Incomes increased 0.2 percent in November after dropping 0.1 percent the prior month. The Bloomberg survey median called for incomes to rise 0.5 percent. The gain was held back by a $12 billion decrease at an annual rate in farm income as commodity prices decreased.

Third-quarter gross domestic product expanded at the fastest rate in almost two years as Americans stepped up spending, the Commerce Department reported last week. Consumer purchases, which account for almost 70 percent of the economy, increased 2 percent, more than the previously reported 1.4 percent.

The unexpected pickup underscored the Federal Reserve’s view that the world’s largest economy is improving.

Spending Breakdown

After adjusting for inflation, purchases also climbed 0.5 percent, the biggest gain since February 2012, after a 0.4 percent increase in October, today’s Commerce report showed.

Household outlays on services rose 0.4 percent in November after adjusting for inflation, the biggest gain since March. The category includes utilities, tourism, legal help, and health care and is difficult for the government to estimate in the short term.

Inflation-adjusted spending on durable goods including cars increased 2.2 percent, the most in a year, after advancing 1.2 percent. Purchases of non-durable goods, including gasoline, were little changed.

The price index tied to spending, a measure of inflation tracked by Fed policy makers, was unchanged in November from the prior month and rose 0.9 percent from the same month last year. The central bank’s goal is for prices to rise 2 percent a year.

Core prices, which exclude the volatile food and fuel categories, increased 0.1 percent from November and advanced 1.1 percent from the same month in 2012.

Saving Less

The saving rate dropped to 4.2 percent last month, the lowest since February, from 4.5 percent.

“The saving rate is coming down, which we don’t exactly like to see,” said IHS’ Edelstein. “That makes us wonder about the durability of this.”

An improving job market is helping sustain spending. Wages and salaries rose 0.4 percent.

While many retailers, including Kohl’s Corp. and Walgreen Co., have adopted more-aggressive promotions this year, car dealerships and furniture stores are reporting improved sales.

At Hooker Furniture Corp. in Martinsville, Virginia, sales in the three months ended Nov. 3 were up 7.8 percent and the company had its second-largest shipping quarter in five years. Orders are solid, said Chairman and Chief Executive Officer Paul Toms.

“We have solid economic fundamentals on our side including conditions for an improved housing market, consumer confidence at a five-month high and a stock market pushing all-time highs,” Toms said on a Dec. 11 earnings call. “We are generally still bullish on both the short and long-term basis.”