Americans Cut Consumption in October

U.S. consumer spending, which surged 0.8% from August to September, fell 0.2% in October, the Dept. of Commerce reports. That marked the first month-over-month decline since May.

Inflation-adjusted consumer spending fell 0.3% in October, the largest drop since September 2009.

Economists say Hurricane Sandy accounted for flat personal income and some of the weakness in spending. But they add that the data underscore the shaky condition of the economy, which faces a sharp contraction in January unless Congress and the White House reach a balanced-budget agreement.

Price increases were subdued in October. The Federal Reserve's preferred inflation measure the consumption price expenditures index excluding food and energy rose 0.1% month over month and increased only 1.6% on an annual basis.