Washington ? Consumers shopped with gusto in July, boosting their spending by 0.8 percent as President Bush’s third tax cut left people with some extra cash in their wallets and pockets.

The increase in spending in July was the largest since March and followed a sizable 0.6 percent advance posted in June, the Commerce Department reported Friday. July’s spending figure matched economists’ expectations.

Americans’ disposable incomes, or what’s left after taxes, jumped by 1.5 percent in July, the largest increase since January 2002, and up sharply from a 0.4 percent gain in June. The government attributed much of July’s increase to the president’s tax cut, which lowered federal tax withholdings, boosting people’s take-home pay.

Excluding the tax impact, disposable incomes increased by a more modest 0.2 percent in July, the government said.

The spending and income figures are not adjusted for price changes.

Consumer spending accounts for roughly two-thirds of all economic activity in the United States.