US Consumer Spending Increases Solidly in October

U.S. consumer spending increased solidly in October, suggesting that the economy maintained its strong pace of growth early in the fourth quarter.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.4% last month after an upwardly revised 0.6% advance in September, the Commerce Department's Bureau of Economic Analysis reported on Wednesday.

Economists polled by Reuters had forecast consumer spending gaining 0.3% after a previously reported 0.5% increase in September.

The Atlanta Federal Reserve is currently estimating gross domestic product rising at a 2.6% annualized rate this quarter. The economy grew at a 2.8% pace in the July-September quarter.

Consumption is being largely underpinned by low layoffs, with additional help from strong household balance sheets thanks to a stock market rally and high home prices.

Household savings also remain lofty. Economists are generally anticipating a fairly decent holiday shopping season, though still-high prices are squeezing budgets.