U.S. consumer spending rebounded by a solid 1.3% in October despite inflation that over the past year has accelerated faster than it has at any point 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 did contribute to the 1.6% rise in spending in November, yet adjusting for inflation, spending was still up a 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.
Pay for Americans has been on the rise with companies desperate for workers, and government stimulus checks earlier this year further padded their bank accounts. That bodes well for a strong holiday season and major U.S. retailers say they’re ready after some companies, like Walmart and Target, went to extreme lengths to make sure that their shelves are full despite widespread