By Chris Isidore @CNNMoneySeptember 28, 2012: 9:31 AM ET
NEW YORK (CNNMoney)
Spending by consumers picked up in August, although people dipped into their savings to buy things, as growth in their paychecks did not keep pace.
Spending increased 0.5% in the month, according to the Commerce Department report, up from a 0.4% increase in July. Spending by consumers accounts for nearly three-quarters of the nation's economic activity, so growth in spending an important driver of economic growth.
But for the second straight month personal income grew by only 0.1%, as the continued weakness in the jobs market has kept wages in check.
Some of the spending was paid for by a drop in the average amount saved by consumers. The savings rate fell to 3.7% of after-tax income, which means the typical worker saved only $3.70 out of every $100 of take-home pay.
Two jobs, hard times
Some of the increase in spending may have been driven by higher gasoline prices in the period, since non-durable goods accounted for the majority of the increase in spending. Gas prices jumped 9% in the month, according to a previous government reading. Excluding the rise in gas prices, spending by consumers crept up only 0.1% in the month.