Consumer Spending Rises —Because Gas Is Up

Americans boosted spending in August even though their income barely grew. But much of the increase went to pay higher gas prices, a sign they may have to cut back elsewhere in coming months. The Commerce Department says consumer spending rose 0.5% in August from July, the biggest jump since February. The increase was led by a 1.7% surge in purchases of nondurable goods, reflecting the sharp rise in gas prices during the month. The so-so numbers, along with weak manufacturing data and Europe worries, had the Dow down about 70 points at mid-day, reports MarketWatch. Meanwhile, the average price of US gas was about $3.80 this week, a record high for this time of year. (More consumer spending stories.)