U.S. consumer spending slowed in May as rising gasoline prices left consumers with less to spend on other items, the U.S. Commerce Department reported today.

Commerce said that spending rose by just 0.4% last month after a 0.7% gain in April. It was the slowest increase in three months.

Income growth also slowed to an advance of just 0.4% last month, reflecting weaker job growth.

The increase in consumer spending in May was in line with Wall Street expectations.

Spending on durable goods, those designed to last three years or longer, dropped by 0.6% in May, after a 0.3% increase in April. Nondurable goods spending rose by 0.7%, after a 1.5% increase in April. Spending on services increased by 0.5%; outlays were 0.4% higher in April.

Excluding price increases, spending was up an even weaker 0.1% in May, down from a 0.2% rise in inflation-adjusted spending in April.

The difference in the actual spending and inflation-adjusted spending reflected the fact that consumers were having to pay more to fill up their gas tanks.

The 0.4% rise in incomes was down sharply from a 0.7% April gain, reflecting the fact that payroll growth slowed to just 75,000 new jobs in May, another sign that the economy is shifting to a lower gear.

The personal savings rate, the amount of saving left from disposable income, dipped to a negative 1.7% in May, down from a negative 1.6% in April.

The savings rate has been negative for 12 consecutive months, meaning that U.S. consumers are dipping into savings or borrowing more to finance a spending level that is exceeding their after-tax incomes.