WASHINGTON (Reuters) - U.S. consumer spending rose as expected in July, data showed on Friday, lifted by the government's "cash-for-clunkers" program that fueled demand for autos.

The Commerce Department said spending rose 0.2 percent after increasing by a revised 0.6 percent in June, previously reported as a 0.4 percent gain.

Analysts polled by Reuters had forecast spending, which accounts for about 70 percent of U.S. economic activity, rising 0.2 percent in July. Adjusted for inflation, spending was up 0.2 percent after gaining 0.1 percent in June.

Personal income was flat in July, the department said, where analysts polled by Reuters had forecast it rising 0.2 percent. Real disposable income edged down 0.1 percent.

However, private wage and salary disbursements increased $6.7 billion in July after a $24.5 billion drop in June.

With disposable income declining, savings slipped to an annual rate of $458.5 billion. That took the saving rate down to 4.2 percent from 4.5 percent in June, the department said.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)