Personal spending in the US continued to stagnate in August as consumers remained disillusioned by the economic slowdown, revealed a government report on Monday.

A report issued by the Commerce Department showed that consumer spending figures remained unchanged in August despite a 0.2% increase in rate of personal spending predicted by economists. The last time consumer spending stagnated to this extent was in February this year.

The only bright spot in the Commerce Department report was a slight increase in the personal income figures which has registered a marginal rise of 0.5% in August. This is particularly welcome as it comes after a revised 0.6% decline in personal income for the month of July. Analysts had forecast that personal income for August would rise by 0.2%. However the report also points out that after adjusting for taxes and price changes, real disposable income for consumers have fallen by 0.9%.

Consumer spending had picked up earlier this year in May and June when stimulus grants worth billions of dollars had been distributed among Americans. The Economic Stimulus Act 2008 had been passed in order to give a fillip to economic activity, the bulk of which is driven by personal spending from consumers.