US personal incomes declineOctober 1st, 2011 - 11:57 am ICT by IANS
Washington, Oct 1 (IANS/EFE) Personal income fell last month for the first time since October 2009, while consumer spending increased 0.2 percent, the US Commerce Department said Friday.
Income from wages and salary dropped by $12.2 billion, or 0.1 percent, in August, surprising most anaylsts, who forecast a 0.1 gain.
The combination of lower earnings and more spending pushed the personal savings rate down to 4.5 percent, the lowest level since the end of 2009.
Higher prices for food and energy accounted for the bulk of the increase in consumer spending.
The Commerce Department’s overall gauge of consumer prices was up 2.9 percent in August. Excluding more volatile food and fuel prices, the index rose 1.6 percent.
The US economy expanded at an annual rate of 1.3 percent in the second quarter, compared with an earlier estimate of 1 percent, the department said Thursday.
The department’s third and final calculation of GDP growth in April-June was slightly above the 1.2 percent forecast by analysts and coincided with government economists’ initial second-quarter numbers.
US growth domestic product grew by only 0.4 percent in the first three months of 2011.
The Commerce Department report also indicated that consumer spending rose by 0.7 percent in the second quarter, better than the previous estimate of a 0.4 percent increase.
Consumer spending accounts fuels around 70 percent of US economic activity.
The US unemployment rate remains at 9.1 percent more than two years after the end of the worst slump since the Great Depression. Last month, for the first since February 1945, the US economy created no net new jobs.
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