August Consumer Spending Flat

Consumer spending in August was the weakest performance in six months the Commerce Department reported. Economists had expected a small 0.2% gain, but spending remained unchanged. It was the weakest showing since spending was also flat in February, according to MSNBC.

Personal incomes were up a better-than- expected 0.5%, a rebound after a 0.6% drop in July. After-tax incomes, which felt the impact of the economic stimulus program to a greater extent, dropped by 0.9%. The government pumped out the bulk of $92 billion in stimulus payments from late April through mid-July. Another $1 billion in payments were made in August but this was far below the monthly peak of $48.1 billion in payments made in May. Overall the economy grew at an annual rate of 2.8% in the April-June quarter, bolstered by the stimulus payments.