Incomes, spending increased in August

After Democrats got enough votes to restart the program in August, incomes rose by about $21 billion. Extended benefits are set to expire at the end of November and lawmakers will need to vote on another extension during the scheduled lame-duck session. 

The spending increase in August matched the rise in July after a flat June report. 

Consumer spending is a major component in the economic recovery, accounting for about 70 percent of all economic activity. The nation's recovery won't pick up speed without an increase in consumer demand, which will likely be triggered by lower unemployment and a sharper rise in incomes. 

During the recession, consumers have focused on paying off debt and saving, with the savings rate notching up slightly to 5.8 percent in August, up from 5.7 percent in July. That's considerably higher than the 2.1 percent reported in 2007 before the recession began. 

Meanwhile, inflation remained low, increasing only 0.2 percent in July. Take out volatile food and energy and prices rose only 0.1 percent, and are up 1.4 percent during the past year.