U.S. consumer spending jumped 0.6% in October as households spent more on prescription medication and utilities. Data for September was revised down to show spending rising 0.2% instead of the previously reported 0.4% gain. The market had forecast consumer spending increasing 0.4% in October.

When adjusted for inflation, consumer spending advanced 0.4%, also the biggest gain in seven months and pointing to a solid pace of consumption early in the fourth quarter.

In October, spending on goods surged 0.5% after gaining 0.1% in September. Outlays on services shot up 0.7% after rising 0.3% the prior month. There was a slowdown in price gains last month. The PCE price index excluding the volatile food and energy components edged up 0.1% after increasing 0.2% in September. That lowered the year-on-year increase in the so-called core PCE price index to 1.8%, the lowest reading since February, from 1.9% in September. The core PCE index is the Fed's preferred inflation measure. It hit the U.S. central bank's 2% inflation target in March for the first time since April 2012.

Despite the strong consumer spending, there are indications that economic growth is slowing. Data this month suggested a moderation in business spending on equipment, a deterioration in the trade deficit as well as further weakness in the housing market.

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