US consumer spending rose 1.3 percent in October, but inflation rose as well, growing at the fastest pace in more than three decades last year
WASHINGTON — US consumer spending rose a solid 1.3% in October, but inflation has risen, rising over the past year at the fastest pace in more than three decades.
The Commerce Department reported Wednesday that the jump in consumer spending last month was more than double the 0.6% increase in September.
At the same time, consumer prices rose 5% compared to the same period last year, the sharpest 12-month gain since the same stretch that ended in November 1990. The rise in prices this year contributed to a 1.6% increase in spending in November, yet adjusting for inflation, spending was still a solid 0.7% after an inflation-adjusted gain of 0.3% in September.
Personal income, which provides fuel for future spending growth, rose 0.5% in October, after falling 1% in September, a reflection of declining government support payments.
Consumer spending, which accounts for 70% of economic activity, is being closely watched by economists, who believe that strength in the sector will lift the overall economy in the last three months of this year.