Consumers shrugged off a rash of bad news to spend more than expected in August while a key measure of inflation eased to the slowest pace in 3 1/2 years. Construction activity also rose above expectations.

The Commerce Department reported Friday that consumer spending rose by 0.6 percent in August, the best showing in four months and better than the 0.4 percent increase that had been expected. In another report, construction spending posted a surprising 0.2 percent gain in August as strength in non-residential construction offset a continued plunge in home building.

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