Chart of the day: Personal spending and the Fed

Real disposable income in the United States rose 0.5 per cent in November after a 0.3 per cent gain in October, while real growth in personal consumption expenditure was up 0.7 per cent after rising 0.2 per cent in the previous month. The total PCE price index fell 0.2 per cent. Assuming real expenditure grows 0.3 per cent this month, MES/Falconridge Advisers expects the quarterly gain in real expenditure will be 4.6 per cent and add 3.1 percentage points to gross domestic product growth. That suggests a 4 per cent quarterly growth rate. Assuming that and a 3 per cent-plus first-quarter growth rate, the Federal Reserve may raise the federal funds rate in June, the firm says, noting any earlier move would likely be too soon.