Every quarter since 1991, American consumers have spent more than they did the previous three months. Spending growth, though, has been weakening since early 2007, as Americans worry about job security, home values and, more recently, dwindling 401(k) balances.

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What’s been happening

Every quarter since 1991, American consumers have spent more than they did the previous three months.

Spending growth, though, has been weakening since early 2007, as Americans worry about job security, home values and, more recently, dwindling 401(k) balances.

The slowdown is accelerating, and High Frequency Economics economist Ian Shepherdson thinks the third quarter could end up showing a “horrific” 2.3 percent decline, once September’s figures are released Oct. 31.

What’s happening now

Consumer spending growth was flat in August, after declining for two months.

But August’s recovery was fueled by better auto sales due to incentives. The strength is unlikely to last, analysts say.

Indeed, Ford, Toyota and Chrysler recently reported that their September sales dropped by more than 30 percent. General Motors’ fell 16 percent, which bodes poorly for the final month of the third quarter.

Why it matters

Consumer spending growth is crucial for the economy, as it makes up the biggest chunk of gross domestic product.

To Global Insight economist Brian Bethune, the dour August figures send a clear message: “It is a recession reality that needs to be confronted with a more aggressive policy response.”