U.S. Consumers Spend More as Incomes Fall

Consumers spent slightly more last month, but they earned less for the first time in nearly two years. The new data on spending and incomes suggest Americans tapped their savings to cope with higher gas prices and a weaker economy.

The Commerce Department says consumer spending rose 0.2 percent in August after a revised 0.7 percent increase in July.

Incomes fell 0.1 percent. That's the poorest showing since a similar 0.1 percent drop in October 2009.

Americans saved less money. The savings rate fell to the lowest level since late 2009.

A decline in income growth could slow the economy, if it causes households to cut back on spending. Consumer spending accounts for 70 percent of economic activity.