WASHINGTON (AP) U.S. consumers slowed their spending in September, even as overall income grew at solid pace for the second straight month.
Consumer spending rose 0.2 percent in September, after at 0.3 percent gain the previous month, the Commerce Department reported Friday. Americans cut spending on long-lasting manufactured goods 1.3 percent. That partly reflected a drop in auto sales. Labor Day holiday weekend auto sales were counted in August.
Income rose 0.5 percent in September, matching the August gain. The increases in both months were the strongest since February. September's gain was helped by the end of government furloughs, which had reduced federal pay in the previous two months.
The gain in income and the slowdown in spending meant consumers saved 4.9 percent of their after-tax income, up from 4.7 percent in August.
The government reported Thursday that the overall economy grew at an annual rate of 2.8 percent in the July-September quarter but the rate of spending gain was slower in the third quarter than the first. Spending grew at a 1.5 percent rate in the third quarter, down from a 1.8 percent increase in the second quarter.