WASHINGTON: US unemployment rate rose to highest in last 26 years, according to the new reports. At the same time the Commerce Department said consumers reduced their spending 0.6 percent last month, following a 1 percent drop in October.
But the steep plunge in gasoline prices, which is good news for consumers, made the declines look worse. Consumers increased their spending last month for the first time since spring, as falling gas prices helped boost their purchasing power, new data showed yesterday.
The Labor Department reported initial requests for jobless benefits rose to a seasonally adjusted 586,000 in the week ending Dec. 20, from an upwardly revised figure of 556,000 the previous week.
Consumer spending drives 70 percent of U.S. economic activity, and last month’s data were slightly better than expected.
It’s being said that consumers kept their eye on their bottom line, however, hitting discount retailers and avoiding big-ticket items such as refrigerators, washing machines and automobiles.
