US consumer spending rose 0.6% in August, official data from the US Commerce Department showed today, which was better than expected amid current credit and housing woes.
This was the strongest gain in four months and up from a 0.4% rise in July.
Meanwhile core consumer prices, which exclude food and energy costs, rose by 0.1% for a sixth consecutive month.
And the annual year-on-year price increase of 1.8% was the smallest rise since a matching gain in February 2004.
Personal income, however, rose a more modest 0.3%, slightly below expectations of a 0.4% gain.
The report suggested that consumer spending, which represents two-thirds of US economic activity, held up in August even as credit conditions tightened in the face of concerns about a wave of failures of subprime mortgages.
Analysts said the report should come as a comfort to the Federal Reserve, which cut interest rates by half a point last week, because it indicates inflation is in check.
