U.S. personal income and spending grew less than expected in November, and a closely watched inflation indicator fell to its lowest level since the spring of 2004.

Personal income rose last month at a seasonally adjusted rate of 0.3%, after climbing a revised 0.5% in October, the U.S. Commerce Department said today. October’s gain was previously reported at 0.4%.

November personal consumption grew 0.3%, after an unrevised 0.2% increase the month before. Economists had forecast a 0.4% increase in both personal income and consumer spending.

Wages and salaries rose 0.2% last month after growing 0.6% the previous month. Disposable personal income — income after taxes — increased 0.3%, following a revised 0.2% increase in October.

Spending on durable goods, those designed to last three years or longer, rose 2.7% in November, after a 2.4% drop in October and steeper declines the preceding two months. Nondurable goods spending fell 1.0% in November, after a 0.5% increase the previous month. November spending on services grew 0.5%, matching the pace of growth the month before.

Personal saving as a percentage of disposable personal income was negative 0.2% in November, matching its level in October.

A price index for personal consumption expenditures excluding food and energy, grew 0.1% in November, matching its growth rate in October. But including food and energy, the overall PCE index fell 0.4% in November, its sharpest drop on record.

Compared with a year earlier, the core PCE price index, which excludes food and energy, increased 1.8% in November, the lowest rate since March 2004. Last month’s rate was down from a year-over-year climb of 1.9% in October and 2% the preceding two months.

The Federal Reserve watches the core PCE price index closely for signs of growing inflation pressures. Its “comfort zone” for inflation is considered to be 1% to 2%.

The Fed has raised its key short-term interest rate target by a quarter-percentage point 13 straight times since mid-2004, and financial analysts expect raise rates again at its next meeting Jan. 31. Many observers say the central bank is near the end of its current monetary policy tightening cycle, but financial markets are uncertain when it will stop.

At its last policy-making meeting, on Dec. 13, the Fed signaled concern about both high energy prices and

Separately, initial jobless claims decreased by 13,000 to a seasonally adjusted level of 318,000 in the week ended Dec. 17, the U.S. Labor Department said today. The four-week moving average of initial jobless claims fell by 4,750 to 329,250. On an unadjusted basis, there were 357,876 new claims filed last week.