US Consumer Spending Falls 0.3%, Capping Worst Quarter In Three Decades (Shobhana Chandra)

  Oct. 31 (Bloomberg) -- Spending by U.S. consumers dropped more than forecast in September, capping the weakest quarter in three decades and indicating the economic slump is deepening.

  The 0.3 percent decrease in purchases was the biggest in four years and followed no change in August and July, the Commerce Department said today in Washington. The report also showed that the Federal Reserve's preferred measure of inflation cooled last month.

  ``Consumers have thrown in the towel,'' said Nariman Behravesh, chief economist at IHS Global Insight in Lexington, Massachusetts, who correctly forecast the drop in spending. ``They have no choice but to cut back on spending in a very big way. This is going to be a fairly deep, long recession.''

  Job losses, increases in food and fuel costs and falling property values brought an end to the longest expansion in spending on record and made the economy the most important issue in next week's presidential election. The collapse in lending and sentiment this month indicate Americans will keep retrenching.

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