U.S. consumers cut spending in September and turned gloomier this month, underscoring the the fragile nature of the economy"s recovery even as signs emerged that manufacturing activity may be picking up, Reuters reported. The Commerce Department said on Friday that consumer spending fell 0.5 percent last month, the largest drop since December, after a 1.4 percent increase in August. The decline, which was in line with market expectations, followed the end of a government program to boost auto sales. A separate report showed factory activity in the nation"s Midwest expanding for the first time in more than a year, but employment conditions deteriorated. A dismal job market appeared to weigh on consumers, with the Reuters/University of Michigan final index of sentiment for October slipping to 70.6, from 73.5 last month. For details see U.S. stock indexes briefly pared losses after the manufacturing data, but slipped back to session lows as investors worried about the health of the U.S. consumer. "The irony is consumers are still in a funk even though monthly job losses are shrinking. The economy is in a recovery mode, but it will be a soggy recovery, unless the consumer starts to feel better and spend more," said Cary Leahey, an economist at Decision Economics in New York.
