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Archive for Saturday, October 1, 2005

Katrina, energy prices create cut in spending

October 1, 2005

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Hurricane Katrina caused $100 billion in uninsured losses in August while consumer spending plunged by the largest amount since the September 2001 terrorist attacks, the government reported Friday.

Consumer spending, after adjusting for inflation, plunged by 1 percent in August, as consumers pinched by soaring gasoline prices cut back in spending in other areas.

The sharp drop in spending raises concerns about consumers' staying power in the face of soaring energy bills. Consumer spending is closely watched because it accounts for two-thirds of the economy.

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