Hijjah 18, 1431 / Nov. 24, 2010, SPA -- U.S. consumer spending rose for the fourth consecutive month in October, and a key inflation gauge was at a record low, a government report showed Wednesday, strengthening the Federal Reserve's (Fed's) defense of its decision to loosen monetary policy. The Commerce Department said consumer spending rose 0.4 percent last month after climbing 0.3 percent in September. Economists had expected spending, which accounts for about 70 percent of U.S. economic activity, to increase 0.5 percent. The Fed's preferred measure of consumer inflation - the personal consumption expenditures (PCE) price index, excluding food and energy - was flat for the second consecutive month. In the 12 months through October, the core PCE rose 0.9 percent, the smallest gain on records dating from 1960 and well below the central bank's 1.7 to 2 percent comfort zone. While spending rose in October, it was still weak. Concerns about low inflation and slow economic growth prompted the Fed to inject more money in the economy through additional purchases of $600 billion in government bonds. The asset-purchasing program, known as quantitative easing, is intended to push already ultra-low interests rates further down and spark domestic demand.
