Spending on a Rebound, Climbs 1.1% : Personal Income Increases 0.3% After October’s Plunge

WASHINGTON — Americans’ personal spending, rebounding from the biggest cutback on record, rose a healthy 1.1% in November while personal income posted a moderate 0.3% advance, the government reported today.

The Commerce Department said that the rise in spending followed a 2.1% plunge in October, the biggest decline in 27 years of record-keeping.

The big October decline followed a record September advance of 2%. The swings came from auto sales, which zoomed in late summer as auto makers offered cut-rate financing incentives to clear a backlog of unsold cars. Sales fell after the incentive programs ended.

The 0.3% advance in personal income was slightly below a 0.4% October rise and continued a pattern of moderate growth.

Patterns Watched

Economists are carefully watching income and spending patterns, fearful that debt-burdened consumers may begin cutting back on purchases, a development that could threaten the 4-year-old recovery.

The 1.1% November rise in personal consumption spending, which includes virtually everything except interest payments on debt, reflected gains in purchases of both durable goods--items expected to last three or more years--and non-durable goods.

Sales of durable goods climbed at an annual rate of $4.2 billion after a huge October decline of $73.3 billion, which had reflected the drop in auto sales.

Rise in Non-Durable

Sales of non-durable goods rose by $9.6 billion in November after an $8.2-billion gain the month before. Purchases of services, a category that includes housing costs, rose by $15.8 billion, up substantially from a $6.5-billion October advance.

Americans’ personal savings rate--savings as a percentage of disposable income--declined to 2.8% in November, down from 3.6% in October.

In another report today, the Commerce Department said that U.S. businesses, beset by a sluggish economy and an upcoming tax increase, plan to increase capital spending by only 0.2% in 1987 after an expected 2.6% decline this year.

The department said the investment cutback for this year was the steepest decline since the 1981-82 recession.

Concern over cutbacks in business investment was one reason the Reagan Administration last week lowered its estimate of economic growth for next year from 4.2% to 3.2%, still higher than many private economists are predicting.