US consumer spending slowed in August as Americans spent more to put gas in their cars, Bloomberg Businessweek reported.
After adjusting for inflation, purchases increased by just 0.1 percent, according to Commerce Department data, Bloomberg Businessweek reported. In July, consumer spending rose 0.4 percent.
According to Bloomberg Businessweek:
The pump price for a gallon of regular unleaded gasoline averaged $3.83 through Sept. 27 compared with $3.70 in August and $3.42 the prior month, according to data from AAA, the largest US auto group.
"Demand growth has slowed materially in recent months, across household, business and export sectors. The risks to output growth in the near term remain firmly to the downside,” Peter Newland, a senior economist at Barclays in New York, told Reuters.
Personal income increased by only 0.1 percent in August, and the savings rate fell to 3.7 percent of after-tax income, CNN Money reported.
Yet consumer confidence rose to a four-month high in September, Reuters reported. According to Reuters, the Thomson Reuters/University of Michigan's consumer sentiment index rose to 78.3 from 74.3 in August.
Ward McCarthy, chief financial economist at Jefferies & Co. Inc. in New York, told Bloomberg Businessweek that the consumer confidence measure is “still well below what you would normally consider to be good numbers.” He noted: “The buoyancy can be traced to the fact that the stock market continues to do well. Were the labor market to begin to show more signs of normalcy, I think consumer confidence would rise quite substantially.”
More from GlobalPost: US consumer confidence drops to 9-month low