US consumer spending, a critical growth driver, fell for the first time in five months in September, official data showed amid fears the US economy may slow just after exiting recession.

Household spending fell $47.2 billion or 0.5 per cent last month, as expected by most economists, following a revised 1.4 per cent jump in August, the Commerce Department said. It was the biggest drop since Decem-ber last year.

The fall in spending came as Americans’ income turned flat in September following a 0.1 per cent increase the previous month as the country emerged from nearly two years of recession stemming from a mortgage crisis.

The spending decline was attributed largely to the August end of a highly popular ‘cash-for-clunkers’ programme, which gave consumers a tax credit toward the price of a new car or truck if they traded in a less fuel-efficient vehicle.

The programme spurred consumer spending that fueled economic growth in the third quarter after a year of contractions, hauling the world’s largest economy from the worst recession since the Great Depression, government data showed.

After shrinking a sharp 6.4 per cent in the first quarter, the US economy has been on life support from the federal $787 billion emer-gency stimulus and other crisis measures.

“We expect a growth relapse in the next few quarters - though not into negative territory,” said? Nariman Behravesh, chief economist of IHS Global Insight.

Recent Posts:

• UK firm fined over Iran export
• More crashes plague Toyota
• Food inflation sees Indian PM under fire
• Recovery needs hiring
• Climate change fire burns out

Similar Posts:

• Hit with its worst deflation
• India growth spurt
• A silver lining for Indian economy
• Signs of end to recession
• Big EU economies exit recession