Americans are spending but inflation casts pall over economy
WASHINGTON (AP) — U.S. consumer spending rebounded in October, rising by a a solid 1.3%, and so was inflation, rising over the past year at the fastest pace in more than three decades.
The jump in consumer spending last month was double the 0.6% gain in September, the Commerce Department reported Wednesday.
At the same time, consumer prices rose 5% compared with the same period last year, the fastest 12-month gain since the same stretch ending in November 1990. The surge in prices this year contributed to the 1.6% rise in spending in November, yet adjusting for inflation, spending was up a still-solid 0.7% after a 0.3% inflation-adjusted gain in September.
Personal incomes, which provide the fuel for future spending increases, rose 0.5% in October after having fallen 1% in September, a reflection of a drop in government support payments.
Consumer spending, which accounts for 70% of economic activity, is being closely watched by economists who believe strength in this area will lift the overall economy in the final three months of this year.
Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.