Consumer spending surged in November

Rising wages and plunging gasoline prices buoyed consumer spending last month.

Consumption increased 0.6% after rising 0.3% in October, which was revised up from 0.2%, the Commerce Department said Tuesday. Economists expected a 0.5% increase.

Personal income rose 0.4% after increasing 0.3% the previous month. Economists projected a 0.5% rise.

Separately, a closely watched measure of consumer sentiment notched an eight-year high this month as better job prospects and falling gas prices bolstered Americans' outlook. The Thomson Reuters/University of Michigan index was 93.6, highest since January 2007.

The final reading for the month was up from 88.8 in November, though down slightly from December's preliminary level of 93.8.

"Consumers have become convinced that growing strength in the national economy will result in continued gains in jobs and wages during the year ahead," Richard Curtin, the survey's chief economist, said in a statement.

Economists expected a strong retail sales report earlier this month to foreshadow a broader surge in consumer spending. Wage growth picked up in November, according to a recent Labor Department report, and gasoline prices have tumbled more than 40% since June, leaving consumers more cash for discretionary purchases.