The Commerce Department reported on Wednesday that consumer spending in the U.S. rose 0.5 percent m-o-m in October after a revised 1.2 percent m-o-m increase in September (originally a 1.4 percent m-o-m gain). Economists had forecast the reading to show a 0.4 percent m-o-m advance.

Meanwhile, consumer income decreased 0.7 percent m-o-m in October, following a revised 0.7 percent m-o-m gain in the previous month (originally a 0.9 percent m-o-m growth). Economists had forecast no change m-o-m.

The October drop in personal income reflected a decrease in government social benefits that was partly offset by gains in compensation and proprietors’ income (led by farm).

The personal consumption expenditures (PCE) price index, excluding the volatile categories of food and energy, which is the Fed's preferred inflation measure, was unchanged m-o-m in October, following an unrevised 0.2 percent m-o-m increase in the prior month. Economists had projected the index would be flat m-o-m.

In the 12 months through October, the core PCE increased 1.4 percent, following a revised 1.6 percent climb in the 12 months through September (originally a 1.5 percent climb). Economists had forecast an advance of 1.4 percent y-o-y.