WASHINGTON – Consumers were tightfisted with their money amid soaring gasoline costs in August and hurricane-related disruptions sent applications for jobless benefits to their highest level in seven months.
Overall spending was flat in August. But in its report Thursday, the Commerce Department said July’s increase in consumer spending was 1.1 percent, higher than the 0.8 percent initially reported, as consumers overcame their worries about energy costs and a sluggish jobs market.
Americans’ income, the fuel for future economic growth, increased by 0.4 percent in August following a 0.2 percent rise the previous month. August’s showing was the highest since May, which recorded a 0.5 percent increase.
The spending and income figures are not adjusted for price changes.
Many economists say consumers are tapped out on spending for now, and that business investments will be counted on to charge the economy, which grew at a 3.3 percent annual rate in the second quarter.
“The economic baton has passed from consumers to businesses,” said Sung Won Sohn, economist at Wells Fargo & Co.
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