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Americans boosted spending in August even though their income barely grew. But much of the increase went to pay higher gas prices, a sign they may have to cut back elsewhere in coming months.
The Commerce Department says consumer spending rose 0.5 percent in August from July, the biggest jump since February. The increase was led by a 1.7 percent surge in purchases of nondurable goods, reflecting the sharp rise in gas prices during the month. Spending on durable goods rose 0.3 percent, helped by gains in auto sales. Spending on services rose just 0.2 percent.
Income rose just 0.1 percent in August, reflecting the weak job market. Taking into account inflation, after-tax incomes actually fell 0.3 percent in August, the poorest performance since November.
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