Americans cut spending in June and their income grew at the weakest rate in 9 months

WASHINGTON — Americans cut back on their spending in June for the first time in nearly two years and their incomes grew by the smallest amount in nine months, a troubling sign for an economy that is barely growing.

Consumer spending dropped 0.2 percent in June, the Commerce Department said Tuesday. Some of the decline was caused by declining food and energy prices, which had spiked in recent months. When excluding spending on those items, consumer spending was flat.

Incomes rose 0.1 percent, the weakest growth since September. Many people are responding by saving more. The personal savings rate rose to 5.4 percent of after-tax incomes, the highest level since August 2010.

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Zachary A. Goldfarb 02 Aug, 2011

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