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US households show small gains in income, spending
2007-11-30 06:46:39 AFP

WASHINGTON, Nov 30, 2007 (AFP) - US consumer spending edged higher by 0.2 percent in October, the government said Friday in a report in line with other indications of softer economic growth.

The monthly Commerce Department reading showed personal incomes also rose 0.2 percent.

Both figures were weaker than analyst expectations, which had called for a 0.3 percent rise in spending and a 0.4 percent increase in incomes.

The report suggested that consumers are being squeezed by rising energy prices, falling home prices and growing economic pessimism.

After adjusting for inflation, consumers spent no more than they did in September.

Personal incomes adjusted for inflation fell 0.1 percent, the first decline since April.

A key inflation gauge in the report known as the personal consumption expenditure price index rose 0.3 percent and showed a 2.9 percent year-over-year increase.

Core inflation, which strips out volatile food and energy costs, rose 0.2 percent in October and 1.9 percent in the past year.

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