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US Consumer Spending Falls Yet Again

1% drop greater than forecast; 6 straight months of decline

By Kevin Spak,  Newser Staff

Posted Feb 2, 2009 9:06 AM CST
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(Newser) – Consumer spending fell in December to finish off its worst year since 1961, Bloomberg reports. Purchases fell 1%, topping analyst estimates of a 0.9% decline. It was the record sixth consecutive month spending has fallen, and that streak may get longer, one economist predicted. Thanks to nearly 2.6 million job losses last year, he says, “further declines are likely in coming quarters.”

Circuit City customers walk in and out of a store in San Jose, Calif., Jan. 26, 2009.
Circuit City customers walk in and out of a store in San Jose, Calif., Jan. 26, 2009.   (AP Photo)
Pete Martinez advertises a going out of business sale for Circuit City in San Jose, Calif., on Friday.
Pete Martinez advertises a going out of business sale for Circuit City in San Jose, Calif., on Friday.   (AP Photo)
Consumers continue to be pulling back, and the pace of that does not appear to be easing, one analyst tells Bloomberg.
"Consumers continue to be pulling back, and the pace of that does not appear to be easing," one analyst tells Bloomberg.   (AP Photo)
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COMMENTS
Showing 1 of 1 comment
bacimom
Feb 2, 2009 9:14 PM CST
Who is surprised by this? No one has any cash, more dollars are going monthly to credit card debt due to rising rates and cut lines of credit. The only spending is actual emergency spending as well as food. it's not going to get better until there are living wage jobs for all those able to work, credit card companies stop raising rates but raise minimums on principal, and people feel secure about whether or not they'll be homeless shortly.

 
economic indicators • consumer confidence • unemployment • consumer spending • economy • financial crisis

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