US consumer spending and home sales rose more than expected in October, while new claims for jobless benefits fell sharply last week, suggesting the economic recovery was gaining traction.<br /><br />A surprise decline in orders for long-lasting US-made goods and a second straight monthly drop in consumer confidence, however, offered a reminder that the recovery from the most brutal recession in 70 years would be gradual. The economy resumed growth in the third quarter, helped by government programmes such as a popular $8,000 (£4,800) tax credit for first-time home buyers, which continues to prop up sales.<br /><br />The Commerce Department yesterday said consumer spending, which normally accounts for over two-thirds of US economic activity, increased 0.7 per cent last month after falling 0.6 per cent in September. Economists had expected a gain of 0.5 per cent.<br /><br />Separately, the Labor Department reported that initial claims for state unemployment benefits slid to 466,000 last week, the lowest in more than a year, from 501,000 the prior week. It was the fourth straight weekly decline. Another Commerce Department report showed sales of newly built US single-family homes surged 6.2 per cent to a one-year high last month.