WASHINGTON (AP) — One private economist says it's going to be a "struggle" for consumers to increase spending because incomes are "so soft."
The comment from Ian Shepherdson of High Frequency Economics comes as the government reports that consumer spending fell by the biggest amount in nine months last month.
The decline reflected the end of the government's Cash for Clunkers program.
But with incomes flat, chances of a rebound in spending in the next few months are considered shaky.
And economists are worried that if households cut back on spending to cope with continuing financial pressures, the economic recovery could falter.
Just Thursday, the government reported that the economy grew at an annual rate of 3.5 percent in the summer. But the concern is that much of that growth stemmed from temporary government programs like the auto sales initiative.
Some economists think consumer spending will slow sharply in the current quarter, lowering GDP growth to perhaps 1.5 percent.
And analysts say they can't rule out the possibility of a double-dip recession over the next year.
The Commerce Department says spending dropped 0.5 percent in September, matching economists' expectations. Personal incomes were unchanged as workers contend with rising unemployment and a squeeze on wages.
©2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
