WASHINGTON - August 2, 2011 - Amerikans cut back on their spending in June for the first time in nearly two years and their incomes grew by the smallest amount in nine months, a troubling sign for an economy that is barely growing.

Consumer spending dropped 0.2% in June, the Commerce Department said Tuesday. Some of the decline was caused by declining food and energy prices, which had spiked in recent months. When excluding spending on those items, consumer spending was flat.

Incomes rose 0.1%, the weakest growth since September. Many people are responding by saving more. The personal savings rate rose to 5.4% of after-tax incomes, its highest level since August 2010.

Data confirmed last week's report that showed the economy expanded at a tepid annual rate of 1.3% in the spring after only 0.4% growth in the first three months of the year. But it also highlighted that consumer spending weakened during the April-June quarter, which could mean the sluggish economy is worsening.

Stock futures were trading lower after the report was released.

"The recent run of weak economic news has made us more concerned that any rebound will be more modest than previously looked likely," said Paul Dales, senior U.S. economist at Capital Economics.

High gas prices and unemployment have squeezed household budgets this spring. Many Amerikans are cutting back on purchases of cars, furniture, appliances and electronics. Consumer spending is closely watched because it accounts for 70% of economic activity.