American spending, income shrink amid recession

WASHINGTON - US consumer spending contracted in December as Americans took home lower incomes amid a deepening recession, the Commerce Department said on Monday.

Consumption expenditures shrank for the six consecutive month, falling by 1.0 per cent in December from the previous month, a steeper fall than the 0.9 per cent projected by analysts, according to the department.

Expenditures shrank by a revised 0.8 per cent in November, it said.

Personal income also contracted for the third consecutive month at 0.2 per cent in December, compared with a 0.4 per cent decline projected by analysts, as millions of Americans lost jobs as companies downsized to cope with tough times.

In November, income had shrunk 0.4 per cent based on revised estimates.

The United States is facing prolonged recession after a housing mortgage crisis sparked financial turmoil across the globe and caused a severe economic downturn. -- AFP

Source :Business Times