Real disposable incomes fall for fourth month in a row WASHINGTON (MarketWatch) - U.S. consumer spending fell sharply in September after the government's cash-for-clunkers program ended, the Commerce Department estimated Friday. Real (inflation-adjusted) consumer spending dropped a seasonally adjusted 0.6% in September after a 1% gain in August, the government said. It was the largest decline in spending since December. Meanwhile, real disposable incomes after taxes fell a seasonally adjusted 0.1%, the fourth decline in a row. Despite overall growth in the economy in the third quarter, incomes aren't growing and jobs are still being lost at a rapid pace. In current-dollar terms (not inflation-adjusted), spending fell 0.5% in September after a 1.4% gain in August. Current-dollar incomes were flat after a 0.1% gain in August. Economists surveyed by MarketWatch expected nominal spending to fall 0.4% and incomes to fall 0.1%. Current-dollar income from employee compensation fell 0.1%, the first decline since June. With spending falling faster than incomes, the personal savings rate rose to 3.3% of disposable income from 2.8% in August. Inflation was mild. Consumer prices rose 0.1% and core prices (which exclude food and energy) also rose 0.1%. In the past year, consumer prices are down 0.5%, while core prices are up 1.3%. The September income and spending report fills in monthly details that were released on a quarterly basis in Thursday's gross domestic product report, which showed the economy growing at a 3.5% annual pace, the first growth in a year. In the third quarter, consumer spending rose at a 3.4% annual rate, while real disposable incomes fell at a 0.7% pace. Details The decline in spending in September was largely due to the end of the government's subsidy program for autos. Real spending on durable goods (including autos) fell 7.2% in September after a 6.7% increase in August. Still, the level of spending on durable goods in September was higher than in July. Real spending on nondurable goods rose 0.5% after a 0.9% gain in August. Real spending on services increased 0.1% after a 0.2% increase in August. Incomes from wages and salaries fell 0.2%, the first decline since June. Income from assets fell 0.8%. Small-business income rose 0.1%. Rental income rose 1.9%. Income from transfer payments (such as Social Security, pensions and unemployment) rose 0.8%. Real income excluding transfer payments - one of four key recession-expansion markers -- fell 0.3% for the second month in a row.

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