With fewer tax rebate checks arriving in the mail, consumer spending eased by 0.4 percent in July, the second straight month of declines, the Commerce Department reported this week.
Personal income was also down last month, dropping by 0.7 percent, the report said. Excluding the rebate checks, which were aimed at boosting the sagging U.S. economy by providing Americans with extra spending cash, personal income rose by 0.5 percent in July and 0.3 percent in June.
Most of the checks were issued in May and June.
At the same time, inflation rose by 0.6 percent last month, after rising by 0.7 percent in June. Stripped of food and energy prices, so-called core personal consumption expenditures, a key measure of inflation, rose by 0.3 percent.
Spending declined on a range of goods, including computers, cars and household appliances.