U.S. Consumer Spending Surges Amid Inflation Challenges

U.S. consumer spending grew more than anticipated in October, signaling robust economic momentum, though inflation control remains elusive. The Federal Reserve considers another rate cut, despite potential tariff hikes from the incoming Trump administration. Consumer spending rose by 0.4%, driven by service sectors, while inflation remained a concern.

In October, U.S. consumer spending increased slightly more than predicted, bolstered largely by service sector demand, according to the Commerce Department's Bureau of Economic Analysis. This spending uptick underscores a solid economic momentum entering the fourth quarter, economists say.

However, the Federal Reserve's effort to rein in inflation has shown little success in recent months. The PCE price index remained steady, reflecting ongoing inflationary pressures. Experts warn that proposed tariff hikes from the impending Trump administration may restrict potential rate cuts next year.

Consumers face budget strains during the holiday shopping season as prices remain high, though Adobe data indicates a 9.6% increase in online spending. Financial markets anticipate a potential rate cut at December's Federal Reserve meeting, but some analysts remain skeptical.

(With inputs from agencies.)