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US consumer spending powered ahead in October although the economy was confronted by the biggest and fastest inflation wave in 31 years, setting up the economy for a year-end growth spurt.
Purchases of goods and services, unadjusted for changes in prices, increased 1.3%, the most since March, following a 0.6% gain in September, Commerce Department figures showed Wednesday. After adjusting for higher inflation, spending rose a healthy 0.7%.
Prices in the US kept surging in October, frustrating hopes for weaker inflation and raising fresh concerns around the strength of the economic recovery.
The Personal Consumption Expenditures Price Index surged 0.6% in October, the Commerce Department said Wednesday. That came in below the median estimate of a 0.7% jump from economists.
It also marks the fastest inflation rate since June 2008 and a significant acceleration from the 0.3% growth seen in September. The index climbed 5% on a year-over-year basis. That compares to the forecast for a 5.1% jump and reflects the strongest one-year inflation since late 1990.
