Washington, D.C. A series of gloomy economic reports Wednesday showed consumers holding tight to their wallets with job losses expected to mount in the months ahead.
There was one glimmer of good news, however. Lower gas prices and widespread holiday discounts are giving consumers greater buying power. Consumer spending, when adjusted for those price drops, rose last month after five months of declines, the Commerce Department said.
Late Wednesday, the Federal Reserve granted a request by the financing arm of General Motors to tap the government’s $700 billion rescue fund, bolstering GM’s ability to survive.
The Fed said it had approved GMAC Financial Services’ request to become a bank holding company. That designation makes GMAC eligible to receive a portion of the bailout fund and get emergency loans directly from the Fed.
Analysts had speculated that without financial help, GMAC would have had to file for bankruptcy protection or shut down.