Consumer spending in the U.S. declined in September for the first time in eight months, according to the U.S. Commerce Department.

The 0.2% drop from the month before follows a 0.5% gain in August from July.

The new report also showed personal income for September increased 0.2% from August, the smallest monthly gain since December, while the personal savings rate increased to the highest level since December 2012.

The personal spending data was included in Thursday’s gross domestic product report that showed it increased at an annual rate of 3.5% in the third quarter of the year.

Consumer spending is a closely watched measure because it accounts for around two-thirds of all U.S. economic activity. This weaker performance is likely playing into expectations the overall economy will throttle back in the final quarter of the year.

All this will likely translate into less overall U.S. economic growth for the final quarter of the year, according to Sterne Agee Chief Economist Lindsey Piegza.

“While we hate to burst a perfectly good 3.5% bubble…[the]report did little more than confirm what we've been expecting for some time - modest growth in the third followed by further weakness at the end of the year, translating into a sub-2% growth rate for 2014.
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Evan Lockridge

Evan Lockridge

Former Business Contributing Editor

Trucking journalist since 1990, in the news business since early ‘80s.

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