U.S. consumer spending rises in October

U.S. consumer spending continued to rise in October, suggesting a strengthening economic recovery, the U.S. Commerce Department said Wednesday.

Personal spending rose 0.3 percent in October from the previous month, following a revised 0.7 percent gain in September, the Commerce Department said. When adjusted for inflation, personal spending edged up 0.1 percent last month.

Personal income increased 0.6 percent in October, the largest monthly increase since April and up from a revised 0.4 percent gain in September. Meanwhile, personal savings rate climbed to 6 percent from 5.7 percent in the previous month.

The price index for the personal consumption expenditure (PCE), a gauge for the inflation level preferred by the U.S. Federal Reserve, increased 0.2 percent from a month earlier.

The core PCE price index, excluding volatile food and energy, increased 0.1 percent from the previous month and 1.7 percent from a year ago, still below the central bank's target of 2 percent.

Economists said the rise of personal income and savings rate in October will pave the way for growing consumer spending and stronger economic growth over the next few months.

Consumer spending accounts for about two-thirds of economic output. The upbeat economic data is likely to reinforce the expectation that the Federal Reserve will raise interest rates in December.

The U.S. economy grew at an annual rate of 3.2 percent in the third quarter of this year, higher than 1.4 percent in the second quarter, according to the Commerce Department. Endit