US consumer spending falls again

Consumer spending forms the backbone of the US economy

US consumer spending fell for the first time in five months in September, coinciding with the end of the government's car scrappage scheme.

The US Commerce Department says spending dropped 0.5% in September, compared with a 1.4% rise in August.

The $3bn (£1.8bn) "cash-for-clunkers" programme offered customers $3,500 towards the cost of a new vehicle.

Car firms reported falling sales in September after the scheme ended. General Motors saw sales drop 45%.

Wages and salaries also dropped 0.2% in September, after a 0.2% gain the previous month.

The figures were released in the same week that it was announced that the US recession had ended.

Most economists think the figures show that the outlook is better than expected.

"The fact that September held up well after the end of the 'cash-for-clunkers' programme is a good sign," said Peter Jankoskis at Oakbrook Investments.

"The fact that it wasn't worse than expected is putting a floor under the futures right now. It's not positive news, but it may be preventing it from falling further."