Personal Spending, Incomes Drop in August

ersonal spending fell 0.5% in August, the biggest drop in three years, led by a slump in automobile purchases, the Commerce Department reported Friday.

An increase in consumer spending could increase demand for new factory goods and the trucking shipments that get them to stores.

The spending drop — which followed a revised 1.2% rise in July — was coupled with a drop in personal income of 0.1%, following a 0.3% increase in the previous month.

Inflation-adjusted spending on durable goods such as automobiles fell 8.9%, while spending on services, which account for 60% of spending, rose 0.2%.