Consumers had a little more to spend, but they didn't

Americans had a bit more money in their wallets last month, but they held on to it, resulting in the weakest spending pace since September 2009, the U.S. Commerce Department reported Monday.

Personal income rose 0.3 percent from April and disposable income by less than 0.1 percent, but spending was unchanged, data show. When adjusted for inflation, the picture looked even less rosy, with disposable income up by 0.1 percent and consumer purchasing down almost 0.1 percent, the report said.

In revised April data, inflation-adjusted figures show it was the first time in 12 months that consumer spending fell, by 0.1 percent.

One consumer-behavior expert said people and businesses, both worn down by bad news, now rarely feel the type of buzz that the iPad generated in prying open wallets.

"When I see that the consumer made more money . . . but didn't choose to spend it, that tells me there wasn't enough excitement out there," said Marshal Cohen, chief industry analyst for The NPD Group, a Port Washington market research firm. "We're American consumers; we don't love to hold on to our money . . . The manufacturers and retailers are being extremely cautious and conservative, with no new products and not a lot of excitement out there."

Compared to a year ago, disposable income has been rising in recent months, but that growth is slowing, sinking to 0.6 percent last month, the report said. Despite that, people are still buying at levels above last year, with May showing a 2.1 percent increase from a year earlier.

The auto industry took the brunt of the drop in spending for the second straight month. New and used cars, parts and tires accounted for most of the 1.7 percent decline in durable goods, which includes furniture, appliances, electronics and boats, according to the report.

At Atlantic Honda in Bay Shore, sales this year had been up from a year earlier until May, when the usual daily delivery of five loads of cars turned into one after the March 11 earthquake and tsunami in Japan, said general manager Ricky Alessi. Last month the business sold 251 cars, down from 396 the previous month and 338 a year earlier, he said.

The dealer was nervous enough to have workers drive by competitors to see if other lots were just as "vacant," Alessi said.

The much-watched gas and energy category showed a 1.2 percent drop in prices from April to May but a 22 percent increase from a year earlier, the report said.

Kevin Beyer, owner of Performance Fuels gas station in Smithtown, says his gasoline sales are 15 percent off. Not only does he see more carpools and people making fewer trips, drivers have been waiting until the last minute to do normal maintenance.

"People are spending when they need to, when they have no choice," said Beyer, also the Long Island Gasoline Retailers Association president. "Let's say I would tell a customer you have 4,000, 5,000 miles left on the brakes . . . they'd usually say, 'Go ahead and let's get it done.' Now you have people say, 'I'll come back in two, three months.' "