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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (63803)	2/1/2001 9:02:23 AM
From: UnBelievable	Read Replies (3) \| Respond to of 436258

US Dec Personal Incomes Rise, Spending Steady =========================================================== U.S. Personal Income Dec. Nov. !Surprise: No ! Income 0.4% 0.2%r !Trend:Less ! Expenditures 0.3% 0.3% !Spending Survey:0.2% ! =========================================================== By Jennifer Corbett Dooren Of Dow Jones Newswires WASHINGTON (Dow Jones)--American's incomes rose in December while spending levels remained steady from November. Personal income increased 0.4% in December, the Commerce Department reported Thursday, while personal consumption expenditures rose 0.3%. A large spike in spending on services, which includes utilities, masked weakness in durable and nondurable goods spending. November personal income was revised to an increase of 0.2% from a gain of 0.4% as originally reported. November's spending increase of 0.3% was unrevised. Consumer spending on services rose 0.9% in December after a 0.8% gain in November, partly reflecting higher energy costs. Spending on big-ticket durable goods items such as cars fell 1.9% in December after falling by 0.9% the previous month. Spending on nondurable goods items was flat for the month after falling by 0.1% in November. The rise in December personal income was a bit larger than Wall Street was expecting while the spending increase was mostly in-line. A Dow Jones Newswires/CNBC Survey of 17 economists forecast both income and spending to rise by 0.2% for the month. The data on personal spending was also reflected in Wednesday's fourth quarter Gross Domestic Product report, which showed consumer spending slowing from the pace seen earlier in the year. Consumer spending slowed to 2.9% in the fourth quarter, down from the 4.5% pace set in the third quarter. Many analysts believe consumer spending, which accounts for two-thirds of economic growth, has slowed even more in the current, first quarter. Federal Reserve Chairman Alan Greenspan has said first quarter growth is "probably very close to zero." In an effort to keep the economy from tipping into recession the Fed cut interest rates a half-percentage point for the second time in a month, Wednesday. The Fed noted that "retail sales and business spending on capital equipment have weakened appreciably." The Fed also said rising energy costs "continue to drain consumer purchasing power and press on business profit margins." December's personal income report showed that the savings rate was down 0.8% for the month after being down 0.9% in November. This suggests consumers borrowed or liquidated assets to maintain spending levels. Economists noted the savings rate doesn't account for gains in retirement plan assets or wealth tied up in people's homes. The report showed no acceleration in inflation pressures in December as the price index for personal consumption expenditures advanced 0.1% in December.