(Reuters) – U.S. consumer spending barely rose October as households took advantage of the largest increase in income in seven months to rebuild their savings, a government report showed on Wednesday.
The Commerce Department said consumer spending edged up 0.1 percent, slowing sharply from a revised 0.7 percent increase in September.
Economists polled by Reuters had expected spending, which accounts for about 70 percent of U.S. economic activity, to rise 0.4 percent last month from a previously reported 0.6 percent gain.
When adjusted for inflation, spending nudged up 0.1 percent last month, pointing to a loss of momentum after a relatively strong third quarter, when it grew at an annual rate of 2.3 percent.
Still, that was unlikely to change perceptions of solid economic growth in the current quarter. Income rose 0.4 percent last month, the largest gain since March. That was a touch above economists’ expectations for a 0.3 percent increase and followed a 0.1 percent gain in September.
Taking inflation into account, disposable income rose 0.3 percent, the largest increase since October 2010. It had declined 0.1 percent in September. Savings rose to annual rate of $400.2 billion from $376.9 billion in September.
(Reporting by Lucia Mutikani, Editing by Andrea Ricci)