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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: rich4eagle who wrote (206620)	12/3/2001 9:48:37 AM
From: DOUG H	Read Replies (1) \| Respond to of 769667

Consumer Spending Sets Record in October Dec 3 9:10am ET By Glenn Somerville WASHINGTON (Reuters) - U.S. consumers boosted their shopping at a record pace in October despite the fact their incomes were flat for a second straight month, the Commerce Department said on Monday in a report that showed Americans still eager to snap up a financing bargain in auto showrooms. Encouraged by widespread price discounting and zero-percent financing offered by domestic carmakers, consumption spending shot ahead by a record 2.9 percent to a seasonally adjusted annual rate of $7.188 trillion in October. That more than recaptured a 1.7 percent spending decline in September, which happened in the immediate aftermath of the Sept. 11 attacks, and handily exceeded Wall Street economists' forecasts for a 2.4 percent spending jump. Last week, the group of economists that officially dates U.S. business cycles said the economy entered a recession in March. So far, the government has reported that third-quarter gross domestic product shrank at a 0.4 percent annual rate and it is expected to once again contract during the current fourth quarter. While the economy suffered a blow from the Sept. 11 attacks, which dented consumer confidence as they flattened the World Trade Center in New York and damaged the Pentagon, many analysts hope that the current recession will be relatively mild and that growth will resume by mid-2002. SPENDING IS A TONIC The October spending figures imply that consumers still want to keep buying goods and services, a potent tonic for the economy since such spending accounts for two-thirds of national economic activity. The spending exuberance was in sharp contrast to the slowness in incomes -- flat in both September and October and up a scant 0.1 percent in August. The incomes performance for September and October was the weakest since January 1994, when incomes contracted by 3.9 percent, department officials said. Economist Richard DeKaser said it was known beforehand that the October figures would benefit from strong new-car sales but said the spending nonetheless was impressive. "This needs to be looked at in the context of a solid, solid rebound from September," DeKaser said, adding it also was bolstered by income-tax refund checks. "By the time October rolled around, refunds were burning holes in pockets and auto dealers were trying to reduce inventories. That's the story of the strength in spending," DeKaser said. The biggest bounce in spending during October came for durable goods, which includes new cars. Durables spending zoomed up by a record 13.8 percent to a seasonally adjusted annual rate of $932.7 billion.