Washington, DC, September 30, 2005--Consumer spending and income both declined in August, according to a Commerce Department report.
Personal income fell 0.1%, for it largest drop since January. Consumer spending fell 0.5%, its biggest drop since Nov. 2001. Excluding the impact of Hurricane Katrina, income would have risen 0.2%.
Economists were expecting income to rise 0.3% and for consumer spending to fall 0.2%.
The personal savings rate rose to -0.7%, from a revised record low -1.1% in July. Core inflation is up 2.0% in the past 12 months.
The fall in spending came as energy prices pushed consumer inflation up 0.5 percent, the largest jump since September 1990, the Commerce Department said.
Adjusting for the impact of higher inflation, consumer spending skidded by 1 percent.
Outside volatile food and energy costs, inflation edged up just 0.2 percent. Over the past year, core inflation is up 2 percent, a tick higher than in the 12 months through July.
