Salaries down, spending up in U.S.

Incomes of U.S. citizens fell in July, while consumer spending was up slightly, reflecting the waning impact of President Bush's economic stimulus package, according to a report from the Department of Commerce. Personal incomes fell 0.7% in July, marking the sharpest decline since incomes dropped 2.3% in August 2005, after the economy took a hit from Hurricane Katrina. Consumer spending increased 0.2%, marking the smallest increase since February. That followed increases of 0.8% and 0.6% in May and June, respectively. Personal-consumption expenditures, a measure of price changes in consumer goods and services, fell 0.4% in July, marking the largest decrease since June 2004 and followed a 0.1% decrease in June. Compared with the previous year, personal-consumption expenditures rose 4.5%. The core personal-consumption-expenditure rate, which excludes food and energy costs, increased 2.4% in July, following a 0.3% increase in June.