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WASHINGTON - The U.S. Commerce Department reported today that consumer spending dropped by 1.8 percent in September, following a modest 0.3 percent gain in August. This is the largest drop in more than 14 years, The Associated Press reported.
Americans' personal income, which includes wages, interest and government benefits, was flat in September, reflecting the weakened state of the nation's labor market and the toll of the terror attacks. It was the worst showing since January 1994. In August, incomes rose by a tiny 0.1 percent.
Spending on nondurables, such as clothes and foods, declined by 1.3 percent, the largest drop since March 1993, after rising by 0.3 percent.