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Cautious U.S. consumers cut spending, boost savings

U.S. consumer spending unexpectedly fell in July as savings rose to their highest level in more than 1-1/2 years, indicating that households remain cautious despite an acceleration in economic growth.

The Commerce Department said on Friday consumer spending dipped 0.1 percent last month, the first decline since January, after an unrevised 0.4 percent gain in June.

Economists had expected consumer spending, which accounts for more than two-thirds of U.S. economic activity, to increase 0.2 percent in July. When adjusted for inflation, it slipped 0.2 percent after gaining 0.2 percent in June.

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