Spending up despite pall cast of inflation

WASHINGTON — Americans are doing the main thing that drives the U.S. economy — spending — but accelerating inflation is casting a pall.

A raft of economic data issued Wednesday showed the economy on solid footing, with Americans’ incomes rising and jobless claims falling to a level not seen since the Beatles were still together.

The spike in prices for everything from gas to rent, however, will likely be the chief economic indicator Americans discuss over Thanksgiving Day dinner.

The Commerce Department reported that U.S. consumer spending rebounded by 1.3 percent in October. That was despite inflation that over the past year has accelerated faster than it has at any point in more than three decades.

The jump in consumer spending last month was double the 0.6 percent gain in September.

At the same time, consumer prices rose 5 percent compared with the same period last year, the fastest 12-month gain since the same stretch ending in November 1990.

“Although consumer confidence has declined in the fall because of high inflation, households continue to spend,” said Gus Faucher chief economist at PNC Financial.

Personal incomes, which provide the fuel for future spending increases, rose 0.5 percent in October after having fallen 1 percent in September, which reflected a drop in government support payments.

Pay for Americans has been on the rise with companies desperate for workers, and government stimulus checks earlier this year further padded their bank accounts. That bodes well for a strong holiday season and major U.S. retailers say they’re ready after some companies, like Walmart and Target, went to extreme lengths to make sure that their shelves are full despite widespread shortages.