BLOOMBERG NEWS / AUGUST 2002
U.S. consumers, who have buoyed the national economy so far this year, are showing signs of slowing their spending. Economists say that change may reflect a slowing economy for the fourth quarter.
WASHINGTON >> Consumer confidence probably fell to the lowest level in a year, unemployment rose and manufacturing contracted for a second straight month in October, suggesting economic growth has slowed in the final quarter of the year, reports this week may show. Economic growth
may be slowing
By Carlos Torres and Alex Tanzi
Bloomberg News"The economic outlook has undergone a reversal of fortune," said Chris Rupkey, a senior financial economist at Bank of Tokyo- Mitsubishi Ltd. in New York. "Because factories aren't producing and business isn't hiring, the economy is not yet on firm ground."
The economy didn't add any jobs this month after eliminating 43,000 jobs in September, a Labor Department report may show Friday, based on the median estimate of 51 economists surveyed by Bloomberg News. The economy had added jobs from May though August, ending a 13-month stretch of declines that started in April 2001 at the outset of the recession. The unemployment rate probably rose to 5.8 percent, the highest in three months, from 5.6 percent in September.
Lower confidence and stagnation in the job market may be causing consumers to retrench. Personal spending, which accounts for more than two-thirds of the economy, probably fell 0.2 percent last month, the first decline since November, the Commerce Department is expected to report Friday.
Spending is dropping even as incomes grow, suggesting that less confident consumers are saving more money. Personal income probably rose 0.5 percent, the biggest increase since June, the Commerce report is expected to show. With spending trailing off in September, the economy may be hard-pressed to grow as fast in the fourth quarter as has been.
A Commerce Department report Thursday will probably show that the economy expanded at a 3.6 percent annual pace from July to September, up from a 1.3 percent rate in the second quarter, as consumers bought more cars and businesses added to inventories.
