Consumer spending rose a better-than-forecast 0.6 percent last month, the largest since April, led by strong sales of durable goods.
Consumer spending represents two-thirds of US economic activity.
The increase shows positive indications that the economy is still reasonably insulated from turmoil in the residential housing market.
Increase
The report by the Commerce Department showed that core consumer prices, which exclude food and energy costs, rose by 0.1 percent for a sixth consecutive month.
Income also increased 0.3 percent, down from a 0.5 percent rise in July but in line with Wall Street forecasts.
The rate of wage increases was also slightly down from July.
Construction spending also showed strength, after a predicted drop, increasing 0.2 percent in August after a 0.5 percent decline the month before.
October 1 2007