Consumers opened their wallets and used their credit cards in October, spending the most in seven months.
Spending jumped 0.6 percent as households spent more on prescription drugs and utilities, topping expectations of 0.4 percent.
Consumer spending accounts for more than two-thirds of U.S. economic activity. September’s gain was revised slightly lower to 0.2 percent from 0.4 percent.
Personal incomes increased 0.5 percent, the largest gain since January.
Another report showed weekly jobless claims rose for a third week.
First-time claims for unemployment benefits rose by 10,000 to a seasonally adjusted 234,000 last week, the highest amount since mid-May. That came in higher than the 220,000 estimate. The report may raise concerns that the labor market could be slowing. The prior week was unchanged at 224,000.
Also on the economic agenda, investors will get the latest numbers of October pending home sales. Expectations are for sales to increase by 0.5 percent.