U.S. personal income fell during August, as Hurricane Katrina caused nearly US$100 billion in uninsured property losses, while consumer spending made its sharpest decline in nearly four years as car sales took a tumble.

Meanwhile, the personal savings rate was in negative territory for a third month.

Personal income decreased at a seasonally adjusted monthly rate of 0.1%, after climbing an unrevised 0.3% in July, the Commerce Department said today.

August personal consumption dropped by 0.5%, after a revised 1.2% increase the month before. July spending was initially reported rising 1.0%. The 0.5% decline was the largest decline since a 0.6% drop in November 2001.

Economists had called for personal income to increase by 0.4% and consumer spending to drop 0.2% in August.

Disposable personal income, or income after taxes, eased down by 0.1% in August, following a revised 0.4% advance in July.

The growth of private-sector wages and salaries in August slowed. Wages and salaries rose US$9.1 billion, after climbing US$38.2 billion the month before.

The government said Katrina reduced rental income and proprietors’ income, mostly because of uninsured losses of residential and business property.

Spending on expensive, durable goods plunged 8.9% in August, after rising 6.4% in July.

Non-durable goods spending rose by 1.1%, after increasing 0.7% in July.