U.S. consumer spending slowed in August while personal incomes fell, reflecting the expiration of the $600 weekly benefit for the unemployed.
The Commerce Department reported Thursday that spending grew by just 1%, the weakest showing since spending actually fell 12.7% in April after the coronavirus pandemic shut down large parts of the economy.
The 2.7% drop in incomes followed a gain of 0.5% in July. The August drop reflected the expiration of the $600 expanded unemployment benefit on July 31. Congress has so far failed to come up with a new virus relief package that would restore that benefit.
Many economists are worried that without further government support the economy will slow significantly in the final three months of this year.