The Associated Press
Consumers increased their spending at the weakest pace in six months while applications for unemployment benefits soared last week, two more signs the economy is weakening.
The Commerce Department reported today that consumer spending edged up just 0.2 percent during December – the year’s peak shopping season – down sharply from a 1 percent gain in November. It was the weakest performance in this area since a similar 0.2 percent rise in June of last year.
Meanwhile, the Labor Department reported that the number of laid-off workers filing applications for unemployment benefits soared by 69,000 to 375,000. That was the highest level for jobless claims since the week of Oct. 8, 2005, when the economy was dealing with the disruptions caused by Hurricane Katrina and other Gulf Coast hurricanes.
The increase in jobless claims was more than triple what economists had been expecting although part of the increase was blamed on technical difficulties in adjusting the figures around the Martin Luther King Jr. holiday.