Consumer spending likely rose moderately in November, lifted by strong gains in auto sales.
Economists have forecast that spending and incomes both increased 0.3 percent last month. The Commerce Department will release the report at 8:30 a.m. Friday.
The spending gain would exceed the 0.1 percent increase recorded in October, the weakest showing in four months.
Incomes increased 0.4 percent in October, the most since March, with private wages and salaries driving the gain.
Economists predict that incomes rose in November because employers created 120,000 net jobs during the month, and the unemployment rate dropped from 9 percent to 8.6 percent. More people working means more income growth.
The gain in incomes is among statistics that suggest the economy, which struggled for much of 2011, is finishing the year on an upswing.
The government said Thursday that applications for unemployment benefits fell by 4,000 last week to 364,000. It was the third straight weekly drop. And it pushed applications to the lowest level since April 2008, in the midst of the Great Recession.
The economy remains vulnerable to threats, especially Europe's debt crisis. But the job market is strengthening, and the holiday shopping season is ending up better than expected. As a result, many economists are revising up their growth forecasts.
Analysts at JPMorgan think the economy is growing at an annual rate of 3.5 percent in the current October-December quarter. That would be up from 1.8 percent growth in the July-September quarter and would be the best quarterly gain since the spring of 2010.
Economists expect that growth to be driven by an improvement in consumer spending, which accounts for 70 percent of economic activity. Spending rose at a 1.7 percent rate in the third quarter, more than double the second-quarter gain. JPMorgan analysts expect consumer spending to grow at a 3 percent pace in the current quarter.
Even with the spurt of activity at the end of the year, economists think growth for all of 2011 will be a lackluster 1.7 percent.
They had much higher expectations when the year began. But then a spike in gasoline prices held back consumer spending for other items. And the earthquake in Japan disrupted supply chains for auto and electronic parts, dampening factory production in the United States.
Analysts had worried that a standoff in Congress might result in the loss of a Social Security payroll tax cut that benefits 160 million workers. If Congress doesn't approve an extension, the payroll tax will expire at the end of the year. Congress also hasn't yet approved an extension of emergency unemployment benefits for the long-term unemployed.
Analysts said the loss of those two programs could trim growth next year by as much as a full percentage point. But late House Speaker John Boehner announced that he was dropping demands for holiday season negotiations with the Senate and would support a House vote for a temporary two-month extension of the payroll tax cut and the emergency unemployment benefits, giving lawmakers more time next year to reach a one-year deal.
Even if the programs are renewed for the full year, many analysts do not expect growth in 2012 to be significantly better than in 2011.
JPMorgan economists predict the economy will expand 1.9 percent in 2012, only slightly better than this year.