Ahead Of The Bell: Personal Spending

WASHINGTON (AP) — Consumer spending likely fell in September, as auto sales took a nosedive with the end of the popular Cash for Clunkers program.

While consumer spending actually powered a return to economic growth in the third quarter, the concern is that a broad recovery could falter in the months ahead if such spending, which accounts for 70 percent of economic activity, wanes.

Economists surveyed by Thomson Reuters expect consumer spending dropped 0.5 percent last month, following a 1.3 percent surge in August.

A large reason for the pessimism is that incomes are not keeping up with inflation amid a continued wave of job layoffs that has robbed households of needed pay checks. Personal incomes are expected to be flat in September after edging up just 0.2 percent in August.

The Commerce Department is scheduled to issue the report at 8:30 a.m. EDT Friday.

The government reported Thursday that the overall economy, as measured by the gross domestic product, grew at an annual rate of 3.5 percent in the July-September quarter, signaling that the worst recession since the 1930s has ended.