Latest Commerce Department report shows more than expected rise in US household expenditure in October while incomes declined. Purchases by US consumers increased 0.5 per cent in October compared to prior month. However, personal incomes dropped 0.7 per cent owing to a decline in government supplemental jobless benefits.

The personal savings rate declined to 13.6 per cent, though it remains elevated compared with pre-virus levels. The latest report also reflected a decrease in Lost Wages Supplemental Payments, a Federal Emergency Management Agency program that provides wage assistance to individuals impacted by the pandemic.

The report showed wages and salaries rose 0.7 per cent in October, reflecting stronger-than-expected hiring in the month. While the Federal Reserve will seek inflation that averages 2 per cent over time, current gauges of consumer prices are well below that 2 percent target and decelerated for the first time in six months.