American consumers slowed their spending to a gain of just 0.6% in September, a cautionary sign for an economy that remains in the grip of a pandemic and a prolonged bout of high inflation.
At the same time, a key inflation barometer that is closely followed by the Federal Reserve surged 4.4% last month from a year earlier. Sharply rising prices, in part a result of supply shortages, have imposed a growing burden on American households. For months, annual inflation has remained far above the modest annual rates of 2% or less that prevailed before the pandemic recession.
Friday’s report from the Commerce Department also showed that personal incomes, which provide the fuel for spending fell 1% in September the biggest decline in four months. Wages have been rising in many sectors of the job market as employers struggle to find enough workers to fill jobs. But the expiration of emergency federal programs has subtracted from the nation's overall income.
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