US consumers struggling to manage their debt kept a lid on their spending in August, according to new government data.

The figures show that despite a 0.5 per cent rise in incomes, personal consumer spending remained unchanged.

This may suggest that families are choosing to use any extra cash they have as a result of larger pay checks to reduce their debt levels or boost their savings.

However, recent inflation data revealed that prices are rising at their fastest rate in over 13 years, putting a squeeze on real disposable income.

Commenting, John Ryding at RDQ Economics told AFP: "Consumer spending is on track to decline 2.7 per cent in real terms in the third quarter based on the data for July and August."

Meanwhile, the government is once again attempting to secure the banking of the House of Representatives for its financial rescue package. A vote on the bill is expected on Friday.

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