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WASHINGTON: US consumer spending jumped 0.7 percent in October, helped by a rebound in auto sales, government data showed on Wednesday.
The surge in household expenditures, a key driver of economic activity, rebounded from a a 0.6 percent drop in September, according to Commerce Department data.
The report highlighted volatility from the "cash for clunkers" programme that sparked auto sales until its expiration in August. This resulted in a sharp fall in consumer spending in September, followed by October's rebound.
The data also showed personal incomes grew 0.2 percent and a 0.4 percent increase in disposable income.
The report offers a snapshot on the financial health and spending patterns of US consumers, seen as critical to a sustainable recovery from the worst recession in decades.
Spending had increased four consecutive months before the fall in September.
The October data showed the savings rate fell slightly to 4.4 percent from 4.6 percent a month earlier.
A separate report showed orders for durable manufactured goods fell 0.6 percent in October, dragged down by a slump in defence aircraft and other transportation goods, which can show volatility.
Excluding defence, new orders for durable goods - which are expected to last at least three years - rose 0.4 percent.
Marisa Di Natale at Moody's Economy.com said the report suggested however that manufacturing, leading the US economy recovery, is starting to struggle.
"The bulk of the decline in orders came from machinery manufacturers where orders fell eight percent over the month, the largest decline in the category since January," she said.
"This helped to drag down core capital goods orders by 2.9 percent. Core capital goods orders, a proxy for investment spending in equipment and software in the GDP (gross domestic product) report, have fallen in three of the last four months.
US GDP expanded at 2.8 percent pace in the third quarter, the first growth after four consecutive negative quarters and the worst recession in decades. - AFP/de
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