WASHINGTON, Oct. 31, 2008
Consumer Spending Sinks To 4-Year Low
.3 Percent Drop Bolsters Belief That U.S. Economy Hit A Wall In The Third Quarter
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With reports showing the ongoing financial crisis has driven consumer confidence to a record low, economists believe consumer spending will remain weak in the current quarter, sending overall GDP down by an even bigger amount. (AP)
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The Commerce Department reported Friday that personal spending fell by 0.3 percent last month, the biggest decline since June of 2004. That followed flat readings in both July and August, contributing to the worst quarterly performance in 28 years.
Incomes showed a 0.2 percent rise in September, just half of the August increase, a slowdown that partly reflected the adverse effects of Hurricane Ike along the Gulf Coast. The storm cut into rental payments and earnings from businesses affected by the rough weather and its aftermath.
The September spending decline was slightly worse than economists expected and confirmed that the economy hit a wall in the third quarter because of the weakness in consumer spending, which accounts for two-thirds of total economic activity.
The government reported Thursday that the gross domestic product, the broadest measure of economic health, declined at an annual rate of 0.3 percent in the third quarter, the strongest signal yet that the country was falling into a recession even before the severity of the current financial crisis was fully felt.
With reports showing the ongoing financial crisis has driven consumer confidence to a record low, economists believe consumer spending will remain weak in the current quarter, sending overall GDP down by an even bigger amount. Some analysts are forecasting a drop of 1 to 2 percent in fourth quarter GDP.
Two consecutive quarterly declines in GDP would meet the classic definition for a recession, although the National Bureau of Economic Research uses different monthly measurements to pinpoint the exact beginning and ending dates for recessions. The bureau has yet to rule that the country is in a recession.
The spending report showed that an inflation gauge tied to spending edged up a small 0.1 percent in September, and posted a 0.2 percent rise excluding energy and food. Prices over the past 12 months are up by 4.2 percent, and have risen by 2.4 percent over the past year when food and energy are excluded.
While core inflation is still rising at levels above the Federal Reserve's comfort zone of 1 to 2 percent increases, the central bank is expected to focus on fighting to keep the country out of a severe recession, believing the pressures from inflation will be waning in coming months as energy prices retreat and other costs slow, reflecting the weak economy.
The Fed cut a key interest rate by a half-point on Wednesday to 1 percent, tying the lowest level in the past half-century. Analysts said if the economy remains weak, the Fed could well cut rates again at their last meeting of the year on Dec. 16.
© MMVIII The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.
Add a Comment See all 48 Comments
- the article is about spending being down. well DUH! after the systematic fleecing of america,only millionaires have any money to spend,and since they only spend it on themselves and off-shoring, there is no trickle down to be seen.from an elitist millionaire point of view,sharing the wealth is unheard of. for the rest of middle class americans,it would be nice to be able to save a couple of bucks. they say that all americans are equal, but not when it comes to rich people and their money.
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- hey hillary012, i cant figure out if your a neo con, or just hate obama? you do understand their both democrats?also, obama hasnt ever said the bar was lowered to $100,000 from $250,000 ,that was a sound bite from a question asked to joe biden.thats what i mean by asking if you are a neo con. thats what they do, distort the truth by using soundbites out of context.
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- Anybody notice the Obamma bar has been lowered for tax increase from $250,000 a year to $100,000 a year?
Posted by hillaryin012
This is the only way Obama will find additional tax dollars. The poor do not pay taxes and the wealthy can shelter their money. This only leaves the middle class. This is nothing new. Obama wants to spread the wealth to the ghettos. Guess whose wealth he will be taking. Your middle income wealth. - Reply to this comment
- Putting a wedding gown on a pig doesn''''t change the animal from being a pig.
Posted by Roachcrusher at 04:03 PM : Oct 31, 2008
Dang, that''s a little harsh. You shoulda made the point of looking at her without makeup before you married her. Course, not too many women would have been able to sucker a fella into marriage without the warpaint and the extra padding. - Reply to this comment
- Now, does anybody want to know what *** Cheney and the leaders of the oil and energy corporations talked about in their secret meeting in the White House?
Was this quadrupling oil prices and skyrocketing energy prices part of a White House strategy? - Reply to this comment
- Food, all the costs of living have at least doubled in the last four years. Yet spending is down. Why? Because average salary increases don''t keep up with inflation, making the average Americans poorer than they were four years ago. All this tanks to Bush''s work putting Republican doctrine into law. McCain and Palin can only make matters worse, because as Republicans they will uphold their sworn vows to further Republican doctrine even further, creating a caste system in America similar to the one found in India.
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- JOHN MCCAIN the oold..new bush!
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- how many people bought a big new dodge truck? how many bought a great big ford super duty? how many suburbans and excursions,etc...? then how many of you hated life when gas and diesel prices went to the highest prices in history? gas companies are reporting record profits,auto companies are going out of business and who was the ringleader? GOUGE WORTHLESS BUSHIT. the greatest theif on earth.i wonder if republicans will actually blame him, or somehow say it was bill clintons fault? are democrats and independants the only ones struggling nowadays?how many have been killed so the GRAND OIL PARTY could make a few billion dollars?my mother summed it up in 2000, when republicans run the country we have high prices, and no jobs.how true........
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- first the bushit team plundered wall street with things like enron. then they changed the bankruptcy laws to benefit themselves, then gouge worthless bushit said "homeownership has never been greater" now how many people own their homes? this administration has been about the systematic fleecing of america ever since they stole the white house. were not even counting the ''WEAPONS OF MASS DESTRUCTION'' war that has been their biggest cash cow. nothing but theives,liars and murders. to jail,or hell with all of them.
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- Posts such as this make me laugh. George Bush did not tell you to live beyond your means. The government did not tell you to buy houses you couldn''''t afford. The government did not tell you to max out your credit cards. It is time for people to take responsibility for their own actions.
Posted by rhs648 at 12:27 AM : Nov 01, 2008
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Which includes the people who saved and retired, only to have it all spirited away too?
And you''re right. The government didn''t. Banks did. And now they want all sorts of bailouts too. Even credit card companies are begging for bailouts because 50000 people are having trouble paying them. Talk about a doubly whammy, those same 50000 people paying taxes on top of the cards they''re paying back.
CBS news had that article a day or so ago. - Reply to this comment
- Obama''''''''s Aunt Reportedly Living Illegally in Boston
The Illinois senator''''''''s aunt has been residing in Boston public housing since her request for asylum was denied four years ago.
No wonder Obama wants to spread our welth around instead of his...........
Posted by hillaryin012 at 08:09 AM : Nov 01, 2008
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What''s a "welth"? Are they like the welsh?
And we''re wealthy?
Please give a link re: Obama''s relative living here illegally. I''d love to read it. - Reply to this comment
- If you or I want to blame someone for the ROOT CAUSE of this problem....look in the mirror! Our laid-back attitude over the past 4 decades in this country allows "OUR" Government to be dictated to and "PAID FOR" by Bankers and Wall street Fat Cats. If you and I don''t stand up and say "NO MORE", than your children and grandchildren will suffer in their adult lives as "ECONOMIC SLAVES" YOU MUST GO OUT AND VOTE!!!
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- Stop Buying ANYTHING!!!....Shut it ALL DOWN!!!
The ONLY place a Filthy, Stinking Rich, Scumbag, Neocon Nazi, can be hurt, is in his Wallet.
Food, Mortgage/Rent, Utilities.
All the rest???
Cut them OFF.
(It''''ll take about 2 weeks till the Scumbags in Washington starts talking ALL about how they need to start representing the Citizenry again).....
Posted by singinrich
Hi singinrich - The problem with your suggestion is Congressmen and government employees get paid no matter how bad things are. They also get their health insurance benefits and retirement benefits. Unlike the rest of us, Congressmen give themselves whatever they want and there is nobody to stop them. They do not feel the pain the rest of us suffer. - Reply to this comment
- People are voting with their wallets.
No one can afford another four years of Republicon excess.
Posted by inventagod2
Posts such as this make me laugh. George Bush did not tell you to live beyond your means. The government did not tell you to buy houses you couldn''t afford. The government did not tell you to max out your credit cards. It is time for people to take responsibility for their own actions. - Reply to this comment
- "The Fed cut a key interest rate by a half-point on Wednesday to 1 percent, "
Which means very soon when it hits 0% and still doesnt fix this, they will be PAYING banks to take money- interest rate -1% - Reply to this comment
- The Great Emperor Bush II is unconcerned that the average consumer is not spending any money, mostly because the average consumer HAS NO money to spend.
All that concerns the Great Emperor is that the wealthy and powerful can maintain their lifestyles and keep all the money AT THE TOP where he and the neocon Fascist Nazi Republicans feel it belongs!!!
In the meantime, the Great Emperor is preparing to "stick it to us" ONE MORE TIME, by deregulating as much as he can get away with so that life for the average person will become a living nightmare for the next 4 years!!!
He wishes to make sure that NO ONE will forget his name or the name of the family that has given us all such abundant GRIEF every time they have had a "fruitcake" member of their family occupying the "throne" in the Oval Office!
SIG HEIL, I''LL SHOW THEM ALL!!!, BUSH!!!
sig heil, I MISS JOE, THE PLUMBER!!!, McBush!!!
sig heil, IS THERE A MACY''S IN ANCHORAGE???, Palin!!! - Reply to this comment
People are voting with their wallets.
No one can afford another four years of Republicon excess.- Reply to this comment
- If you try to refrain from assuming all Liberals are unemployed, under educated, Jerry Springer watching Welfare Recipients...
I''''ll try to refrain from assuming that all Conservatives are money grubbing, bible thumping, narrow minded, bigoted trust fund babies.
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Posted by mytoosense -----------------------------------------------
Uh, it''s the hillbilly republicans who are guests on the Jerry Springer Show.... NOT the Liberals. - Reply to this comment
- Call it what you Republican want, it''''s welfare. Call it, Hrummp!, "business incentives," "tax breaks," "subsidies," blah, blah, blah. It''''s WELFARE FOR THE RICH AND GREEDY."
Putting a wedding gown on a pig doesn''''t change the animal from being a pig.
Posted by Roachcrusher at 04:03 PM : Oct 31, 2008
OK I''ll call it a "fact," and you can call it whatever childish name you want. - Reply to this comment
- Sounds to me like America is figuring out that they need to change the way you live. This is the best news I have heard all week. The title of the article should have been "Americans get smarter, spend less." Buy less *** made by slave labor in China, buy less *** manufactured by companies that moved jobs to Mexico, buy less oil from money gauging refinery companies and countries that use that money to attack us. Be happy with less, and expect less from government. Go U.S.A!
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