U.S. consumers grew less pessimistic in late September, which could lead to improved consumer spending, a key driver of the economy.

Friday's report from the University of Michigan shows consumer sentiment improved modestly, as frustration with political wrangling in Washington faded somewhat.

But the data still show Americans worried about high unemployment, a troubled housing market, and falling stock prices.

A separate report showed business activity increased in the U.S. Midwest, aided by new orders and an improvement in employment.

In the meantime, government experts reported that Incomes dropped slightly in the United States in August, the first decline in about two years.

Commerce Department data show consumers saved less and boosted spending slightly.

Economists watch consumer income and spending closely because consumer demand drives most U.S. economic activity.