June 27 - US consumers held their wallets tightly in May, spending no more than they did a month earlier in another sign of the country's limping economy, Commerce Department figures showed Monday.

A pedestrian carries shopping bags (photo: AFP/Getty Images, Justin Sullivan)

With higher prices eating into wages and the job market weak, Americans spent $4.6 billion more than in April, a rise of less than 0.1 percent. With inflation calculated in, it was a 0.1 percent drop.

And while personal incomes rose 0.3 percent, but inflation-adjusted income was up only 0.1 percent.

A key driver of the US economy, consumer spending is closely watched as a barometer of economic growth.

But higher prices for food and especially fuel have been sapping any surplus strength in shoppers' pocketbooks -- the headline inflation rate has been running close to four percent in the second quarter.

Due to the impact of higher prices, indeed, incomes have hardly budged since the beginning of the year.

High Frequency Economics economist Ian Shepherdson blamed the slow spending on the rise in gasoline prices, which helped to put a big dent in automobile sales.

"Even with a rebound in June, (second quarter) spending is set for less than one percent. But (quarter three) will be better, with gas prices falling," he predicted.

But others say the malaise is deeper.

"The first half of the year looks like real growth of two percent, inflation at four percent, and a nine percent unemployment rate," said RDQ Economics. "It looks like a nasty stagflationary brew to us."