U.S. consumer spending edged up 0.2 percent in July, but personal income remained almost flat from the previous month, according to a government report released Friday.
With the help of the popular Cash for Clunkers program that generated the sale of nearly 490,000 vehicles worth more than 2 billion U.S. dollars, the rise in consumer spending last month matched economists' expectations, the Commerce Department said.
Personal income increased 3.8 billion dollars, or less than 0.1percent in July, a weaker showing than the expected 0.2 percent gain.
With incomes flat as spending increased, the personal savings rate dropped 0.3 percentage, from 4.5 percent in June to 4.2 percent in July. The savings rate was 2.6 percent a year ago.
Consumer spending, which accounts for about 70 percent of the economy, is a key factor indicating the trend of the economy.
The Federal Reserve has pushed a key interest rate to a record low near zero in an effort to boost the economy and is pledging to keep rates low for a considerable period even as the economy begins to grow again.