(Stock prices added.)
) -- Consumer spending saw its biggest gain in nearly eight years in August.
The Commerce Department announced on Thursday that personal spending jumped 1.3% during the month, surpassing the 1.1% increase economists expected.
Doug Roberts, chief investment strategist for Channel Capital Research, said much of the boost was due to the cash-for-clunkers program. "This is a government-driven recovery and I don't think any of these programs will ultimately be a long-term solution," he says.
Personal incomes continued to be soft, inching up just 0.2%, the same as July's increase.
Consumer spending accounts for 70% of total economic activity.
Despite the uptick in spending, retail shares were in the red Thursday morning, with the S&P Retail Index off 1% to 373.64.
One of the biggest decliners was
, which sank 4.5% to $6.52 after it was downgraded to neutral from overweight by J.P. Morgan.
American Eagle Outfitters
sank 3.5% to $16.28,
was off 2% to $91.22,
fell 4% to $6.36,
declined 3% to $16.11 and
tanked 3% to $1.58.
-- Reported by Jeanine Poggi in New York
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