Consumers Boost Spending By 0.5 Percent

Economy

Consumer spending rebounded by a bigger-than-expected 0.5 percent in October, a hopeful sign that Americans are ready to spend during the Christmas season after a summer lull.

The Commerce Department said Friday that the rise in personal consumption spending - which accounts for two-thirds of total economic activity - was led by a big jump in demand for personal services such as transportation, housing and recreation.

The big rise in spending was not accompanied by a similar increase in incomes, which were unchanged during the month. Still, analysts said this was not unexpected given that wages and other forms of incomes had posted strong gains of 0.6 percent in both August and September.