Post by unlawflcombatnt on Feb 1, 2008 3:55:46 GMT -6
from the Chicago Tribune:
Consumer Spending Slowed in December
By MARTIN CRUTSINGER
January 31, 2008
"Buffeted by soaring fuel prices and tighter credit, consumers increased their spending at the weakest pace in six months. In other signs of trouble, applications for unemployment benefits last week soared by the largest number since Hurricane Katrina.
The Commerce Department reported Thursday that consumer spending edged up just 0.2 percent in December -- the year's peak shopping season. That was down sharply from a 1 percent gain in November. It was the weakest performance in this area since a similar 0.2 percent rise in June of last year.
Meanwhile, the Labor Department reported that the number of laid-off workers filing applications for unemployment benefits increased by 69,000 to 375,000 last week. That was the highest level for jobless claims since the week of Oct. 8, 2005, when the economy was dealing with the disruptions caused by Hurricane Katrina and other Gulf Coast hurricanes.
The increase in jobless claims was more than triple what economists had been expecting....Analysts said the greater concern was the slowdown in consumer spending, which they predicted would continue in the current quarter, the period many believe will be the maximum danger point for a recession.
The overall economy...slowed to an anemic growth rate of 0.6% in the final 3 months of 2007, half of what had been expected, and many analysts believe it could dip into negative territory in the current quarter. By one definition, a recession occurs when GDP is negative for two consecutive quarters....
"Happy holidays is not a phrase that retailers are using to describe this year's shopping season," said Joel Naroff, chief economist at Naroff Economic Advisors.
Despite widespread discounting, retailers slogged through their weakest Christmas sales season in 5 years as consumer confidence was shaken by the deep slump in housing, a severe credit squeeze and last year's big increases in the cost of gasoline and other energy products.
On Wall Street, stocks ended a turbulent January with a huge advance on Thursday as investors grew more optimistic that the aggressive intrest rate cuts by the Federal Reserve will help rescue the economy. The Dow Jones industrial average rose 207.53 points to close at 12,650.36. For the month, thd Dow lost 4.63 percent....
President Bush and House leaders reached quick agreement on an economic stimulus plan last week. However, the package has slowed in the Senate where the Senate Finance Committee gave approval to an expanded effort on Wednesday despite warnings by the administration....
Treasury Secretary Henry Paulson, who is leading the administration's negotiations with Congress, told reporters Thursday that he was concerned that the extra Senate provisions would create "a real risk that the process will bog down and slow our efforts to get money into the economy."
The 0.2 percent rise in consumer spending looked even worse when price changes were removed.
Inflation-adjusted spending did not increase at all last month...."
Consumer Spending Slowed in December
By MARTIN CRUTSINGER
January 31, 2008
"Buffeted by soaring fuel prices and tighter credit, consumers increased their spending at the weakest pace in six months. In other signs of trouble, applications for unemployment benefits last week soared by the largest number since Hurricane Katrina.
The Commerce Department reported Thursday that consumer spending edged up just 0.2 percent in December -- the year's peak shopping season. That was down sharply from a 1 percent gain in November. It was the weakest performance in this area since a similar 0.2 percent rise in June of last year.
Meanwhile, the Labor Department reported that the number of laid-off workers filing applications for unemployment benefits increased by 69,000 to 375,000 last week. That was the highest level for jobless claims since the week of Oct. 8, 2005, when the economy was dealing with the disruptions caused by Hurricane Katrina and other Gulf Coast hurricanes.
The increase in jobless claims was more than triple what economists had been expecting....Analysts said the greater concern was the slowdown in consumer spending, which they predicted would continue in the current quarter, the period many believe will be the maximum danger point for a recession.
The overall economy...slowed to an anemic growth rate of 0.6% in the final 3 months of 2007, half of what had been expected, and many analysts believe it could dip into negative territory in the current quarter. By one definition, a recession occurs when GDP is negative for two consecutive quarters....
"Happy holidays is not a phrase that retailers are using to describe this year's shopping season," said Joel Naroff, chief economist at Naroff Economic Advisors.
Despite widespread discounting, retailers slogged through their weakest Christmas sales season in 5 years as consumer confidence was shaken by the deep slump in housing, a severe credit squeeze and last year's big increases in the cost of gasoline and other energy products.
On Wall Street, stocks ended a turbulent January with a huge advance on Thursday as investors grew more optimistic that the aggressive intrest rate cuts by the Federal Reserve will help rescue the economy. The Dow Jones industrial average rose 207.53 points to close at 12,650.36. For the month, thd Dow lost 4.63 percent....
President Bush and House leaders reached quick agreement on an economic stimulus plan last week. However, the package has slowed in the Senate where the Senate Finance Committee gave approval to an expanded effort on Wednesday despite warnings by the administration....
Treasury Secretary Henry Paulson, who is leading the administration's negotiations with Congress, told reporters Thursday that he was concerned that the extra Senate provisions would create "a real risk that the process will bog down and slow our efforts to get money into the economy."
The 0.2 percent rise in consumer spending looked even worse when price changes were removed.
Inflation-adjusted spending did not increase at all last month...."