Declining Consumer Spending Belies Slowing Economy

Some more "unexpected" news coming out of the economy. Consumer spending has fallen as wages are not keeping up with inflation.

Oh, and those new taxes haven't helped.

The retrenchment in spending indicates consumers may be starting to feel the impact of higher taxes. But a separate report Friday showed consumer confidence rose to a six-year high in May, suggesting the decline in spending may be temporary.

Americans are taking home less pay this year because of a 2 percentage point increase in Social Security taxes. A person earning $50,000 a year has about $1,000 less to spend this year. A household with two high-paid workers has up to $4,500 less.