Washington, D.C. (AHN) – Consumer spending fell 0.5 percent in September, a dramatic drop that marked the first decline in five months, the Commerce Department reported Friday.

It was the most severe decline since December 2008.

In August, personal income and disposable personal income were essentially unchanged, with both falling less than 0.1 percent, the department reported. Adjusted for inflation, disposable income decreased 0.1 percent after dropping 0.2 percent in August. After rising 1 percent in August, real personal consumption expenditures decreased 0.6 percent.

The rate of personal savings rose to 3.3 percent from 2.8 percent the previous month.

Consumer prices rose 0.1 percent, the same rate as prices excluding food and energy, also known as core prices. For the past 12 months, consumer prices have declined 0.5 percent while core prices have climbed 1.3 percent.

The end of the “cash for clunkers” program had a significant impact on real spending on durable goods. The category fell 7.2 percent in September after soaring 6.7 percent in August. Real spending on nondurable goods grew 0.5 percent, adding to the 0.9 percent in August.

Wages and salaries decreased 0.2 percent after increasing by 0.2 percent the previous month. It was the first decline since June.

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