WASHINGTON — Consumer spending, bolstered by brisk auto sales, jumped 1.5% in August, the biggest increase in six months, the government said today.
The Commerce Department said that Americans' incomes were also up in August but by a much smaller 0.5%, matching the moderate gain posted in July.
With the growth of spending far outpacing the growth in incomes, Americans dipped deeper into savings to make up the difference. Personal savings, the ratio of savings to after-tax incomes, fell to 1.8% in August, down from 2.9% in July and the lowest it has been since a 1.4% rate in April.
Even with the low savings rate, the report showed the economy gaining momentum in the current July-September quarter because of the fast pace of consumer spending, which accounts for two-thirds of all economic activity.