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Consumer spending, which makes up more than
two-thirds of U.S. economic activity, was previously reported to
have declined 0.2 percent in September.
Economists polled by Reuters had forecast consumer spending
rising 0.3 percent last month. When adjusted for inflation,
consumer spending also rose 0.2 percent after being flat in
September.
Extremely low gasoline prices as well as a strengthening labor
market are supporting consumer spending, which should help to
shield the economy from slowing growth in China and the euro
zone, as well as a recession in Japan.
The government reported on Tuesday that the economy grew at a
3.9 percent annual pace in the third quarter. Income rose a
modest 0.2 percent in October after a similar gain in the prior
month. With income growth matching consumer spending, the saving
rate was unchanged at 5.0 percent.
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 percent after a similar gain in
September.
In the 12 months through October, the personal consumption
expenditures (PCE) price index rose 1.4 percent after advancing
by the same margin in September.
Excluding food and energy, prices rose 0.2 percent after gaining
0.1 percent in September. The so-called core PCE price index
increased 1.6 percent 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 percent inflation target.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)
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