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US consumer spending rebounds, income rises modestly
[WASHINGTON] US consumer spending rebounded in October, suggesting some resilience in the economy at the start of the fourth quarter.
The Commerce Department said on Wednesday consumer spending increased 0.2 per cent last month after being flat in September.
Consumer spending, which makes up more than two-thirds of US economic activity, was previously reported to have declined 0.2 per cent in September.
Economists polled by Reuters had forecast consumer spending rising 0.3 per cent last month. When adjusted for inflation, consumer spending also rose 0.2 per cent after being flat in September.
Extremely low gasoline prices as well as a strengthening labour market are supporting consumer spending, which should help to shield the economy from slowing growth in China and the eurozone, as well as a recession in Japan.
The government reported on Tuesday that the economy grew at a 3.9 per cent annual pace in the third quarter.
Income rose a modest 0.2 per cent in October after a similar gain in the prior month. With income growth matching consumer spending, the saving rate was unchanged at 5.0 per cent.
The moderate pace of consumer spending, combined with weak gasoline prices, kept inflation under wraps. A price index for consumer spending edged up 0.1 per cent after a similar gain in September.
In the 12 months through October, the personal consumption expenditures (PCE) price index rose 1.4 per cent after advancing by the same margin in September.
Excluding food and energy, prices rose 0.2 per cent after gaining 0.1 per cent in September. The so-called core PCE price index increased 1.6 per cent in the 12 months through October, the largest gain since December 2012.
Both price measures continue to run below the U.S. central bank's 2 per cent inflation target.