Core stores hit hard in November

In a troubling sign that consumers are retrenching this holiday season, consumer spending and orders for durable goods fell further in November, according to government reports released Wednesday.

A Commerce Department report showed spending by individuals fell 0.6% last month, after falling 1% in October. It was the fifth consecutive monthly decrease. Economists surveyed by Briefing.com had forecast a 0.8% drop.

Falling consumer prices contributed heavily to the decline in overall spending. When prices were not taken into account, spending actually rose by 0.6%.

The so-called core PCE deflator rose by just 1.0% in the past 12 months, down from 2% by that measure in October. The key reading, which measures prices paid by consumers for goods and services other than food and energy, echoes a Labor Department report released last week that showed consumer prices fell by a record amount for the second straight month.

Still, declining overall spending is a worrisome sign for the holiday shopping season. It's particularly troubling for the economy, because consumer spending accounts for more than two-thirds of the nation's gross domestic product.

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