Consumer spending up weak 0.1 percent in October

Personal income increased $68.1 billion, or 0.4 percent, in October, according to the Bureau of Economic Analysis, up from a 0.2 percent increase in September.

The report came on the heels of data this month showing a solid increase in manufacturing output in October.

Personal spending advanced 0.1% (m/m) in October, well shy of the 0.3% expected by economists. Incomes rose 0.4% in October, the latest in a string of steady gains. The portion of disposable income that was saved jumped to 5.6 percent, from 5.3 percent the previous month.

Other reports Wednesday showed demand capital equipment climbed in October by the most in three months and fewer Americans filed for unemployment benefits last week.

Americans spent less on autos, gasoline and utilities last month.

"The personal saving rate will not dip below 5.0 percent as long as consumers are still keen on stashing away their prior windfalls to guard against potential negative events to their wealth". It rose 0.2 percent from the same time in 2014.

Weak consumer spending will probably do little to change expectations that the Federal Reserve will raise interest rates next month.

Federal Reserve Governor Daniel Tarullo is among central bankers monitoring low inflation even as employment has shown steady gains. In the 12 months through October, the personal consumption expenditures (PCE) price index was up 0.2 percent after a similar rise in September.

"The surge in core capital goods orders could be a crucial signal that this important sector of the economy may be at a turning point, further bolstering the Fed's confidence in the sustainability of the economic recovery", said Millan Mulraine, deputy chief USA economist at TD Securities in NY.

Steady gains in consumer purchases will be needed to keep USA growth churning.

The government on Tuesday reported that the overall economy, as measured by the gross domestic product, grew at an annual rate of 2.1 percent in the July-September quarter, an upward revision from an initial estimate of 1.5 percent GDP growth in the third quarter.

An improving labor market, nascent signs of a pickup in wage growth, and still-cheap prices at the pump have helped provide Americans the wherewithal to spend. They had been stuck around near 2 percent on average since the current expansion began in mid- 2009. Part of that weakness reflected falling gasoline prices.