By Timothy R. Homan Dec. 23 (Bloomberg) -- Spending by U.S. consumers increased in November for the sixth time in seven months as households took advantage of holiday discounts. The 0.5 percent increase in purchases was smaller than the median estimate of economists surveyed by Bloomberg News and followed a 0.6 percent gain in October, Commerce Department figures showed today in Washington. Incomes climbed 0.4 percent, the biggest increase since May. Retailers such as Best Buy Co. are cutting prices on some items to help Americans overcome the worst employment slump in the post-World War II era and mounting foreclosures. Growing sales indicate consumers will contribute to, rather than hold back, the economic expansion in coming months. “Holiday retail spending appears to be moderately better than 2008,” Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia, said before the report. Income gains will “aid total spending in the critical last two months of the year,” he said. The median estimate of 72 economists surveyed called for a 0.7 percent increase in spending, matching an originally reported gain of 0.7 percent the prior month. Projections ranged from gains 0.4 percent to 0.9 percent. The gain in incomes followed a 0.3 percent increase in October. Wages and salaries grew 0.3 last month, the biggest gain since April. Less Inflation Today’s report showed prices were stabilizing, reflecting discounting by retailers. The Federal Reserve’s preferred price measure, which is tied to spending patterns and excludes food and fuel, was unchanged in November from the previous month, the first time it didn’t increase this year. The gauge was up 1.4 percent from a year earlier, the same as in October. Prices overall climbed 0.2 percent after increasing 0.3 percent in October. Adjusted for inflation, spending climbed 0.2 percent following a 0.4 percent rise the prior month, restrained by a decline in purchases of services. The increases in spending and incomes left the savings rate at 4.7 percent in November, unchanged from the prior month. Inflation-adjusted spending on durable goods, such as autos, furniture, and other long-lasting items, climbed 1.2 percent last month. Purchases of non-durable goods increased 0.6 percent, and spending on services, which account for almost 60 percent of all outlays, fell 0.1 percent. Retailer Discounts Best Buy, the largest U.S. electronics retailer, is promoting notebook computers and $299 flat-screen televisions to lure consumers. As a result, the Richfield, Minnesota-based company will see its gross margin decline by as much as 1 percentage point in the fourth quarter, Chief Executive Officer Brian Dunn said on a Dec. 15 conference call with analysts. The labor market remains a hurdle. The jobless rate is projected to exceed 10 percent through the first half of next year. Payrolls fell by 11,000 last month, bringing total job losses to 7.2 million since the recession began in December 2007, the most of any contraction since the Great Depression. To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net

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