US consumer spending adjusted for inflation was flat in August as income fell for the first time in nearly two years amid a weak labour market, according to a US government report.
Real consumer spending was unchanged after rising 0.4% in July. Nominal spending was up 0.2% after increasing 0.7% in July.
Consumer spending accounts for about 70% of US economic activity.
Weak incomes as employment growth ground to a halt and earnings fell hurt spending in August. Income slipped 0.1%, the first decline since October 2009, with private wages and salaries dropping $12.2 billion.
Economists had expected income to edge up 0.1%.
Consumer spending growth slowed sharply to a 0.7% annual pace in the second quarter after advancing 2.1% in the first three months of the year.
Last month real spending on goods fell 0.2%, while services ticked up 0.1%.
Disposable income was unchanged for the first time since September, but when adjusted for inflation fell 0.3%, the largest drop since October 2009.
With real disposable income weak, savings fell to an annual rate of $519.3 billion, the smallest since December 2009, from $550.5 billion in July.
The savings rate dropped to 4.5%, also the lowest since December 2009.
