Consumer Spending Jumps 1.3% in August

Consumer spending shot up in August by
the largest amount in nearly eight years even though personal
incomes continued to lag.

Costco shopper Francisca Merino loads her family groceries onto the check-out counter at a Seattle store Thursday, May 29, 2008. Consumers stepped up their shopping in May after tax rebate checks hit mailboxes, giving many of the nation's retailers stronger than expected sales for the month. Still, there were signs that many people are still focusing on necessities such as food and gas. (AP Photo/Elaine Thompson)

WASHINGTON (AP) - Consumer spending, propelled by the wildly
popular Cash for Clunkers auto sales program, shot up in August by
the largest amount in nearly eight years even though personal
incomes continued to lag.

The Commerce Department says that consumer spending rose 1.3
percent in August, even better than the 1.1 percent gain that had
been expected. Incomes continued to lag, edging up 0.2 percent in
August, the same as the July increase.

The big jump in consumer spending, which accounts for 70 percent
of total economic activity, is a good indication that the economy
was returning to positive growth this summer. But economists are
worried that any rebound from the recession could falter if income
growth does not improve.


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