Consumer spending is at its highest level in six months, mostly due to an increase in gasoline prices.

The U.S. Department of Commerce said spending was up half a percent in August, now standing at $57.2 billion. Americans bought more cars, but they also spent more on gas, which now averages $3.79 per gallon, according to AAA. That's up 32 cents from last year's average of $3.47.

Food prices are also up, as a drought in the Midwest this summer has reduced available crop yields. Meat prices are expected to soar next year.

In contrast, personal incomes only rose a tenth of a percent, so many consumers tapped into their savings to afford their purchases. The savings rate is down to 3.7 percent, falling from 4.1 percent in July.

Stocks are down, with the S&P 500, the Nasdaq, and the Dow Jones Industrial Average all falling this week. However, consumer confidence is up, buoyed by rising home values.

Jobless claims are also down, falling to their lowest levels since July. In all, the economy is quite volatile.

"Demand growth in has slowed materially in recent months, across household, business and export sectors. The risks to output growth in the near term remain firmly to the downside," said Peter Newland, a senior economist at Barclays in New York, speaking to Reuters.

Paul Dales, senior U.S. economist at Capital Economics, agrees. "The data are worse than the headline figures suggest and indicate that subdued jobs growth is hitting incomes." He said, speaking to the Financial Times.

"With the saving rate having fallen back, it's not as though households can fund extra spending by dipping into their savings.

Still, many consumers remain upbeat. A revision in the job creation numbers from the past year reveal that nearly 400,000 more jobs were created than previously thought, bringing the Obama presidency into the net positive on job gains.

Related Stories
Obama Job Creation Record Now Net Positive: New Estimate
Jobless Claims Fall, Lowest Since July
Worst Day for S&P Since June, Dow and Nasdaq Down, Bonds Up
Consumer Confidence Index Hits Seven-Month High