US consumers keep spending
US personal spending jumped at the fastest rate on record in October, despite the recession and the US terror attacks.
Shoppers were encouraged to carry on spending by free car financing deals.
The US Commerce Department says personal spending rose by an all-time high of 2.9% in October, led by a record increase in purchases of autos and other durable goods.
At the same time, personal incomes, reflecting the huge number of layoffs in the wake of the terrorist attacks, showed no increase in October for the second straight month, the worst showing in more than seven years.
Americans' incomes after tax fell during October, reflecting the layoffs and the fact that the government's tax refund mailings were coming to an end.
The 1.7% in after-tax incomes and the record increase in spending meant that Americans' personal savings rate dipped to a record low of 0.2% in October.
The record 2.9% increase in spending followed a large decline of 1.7% in September, when the U.S. economy came to a virtual halt.
However, car makers succeeded in luring shoppers back into showrooms by offering attractive zero-interest-rate financing deals that triggered record auto sales in October.
The October spending increase surpassed the old monthly record of a 2.6% increase in September 1986.
Led by the huge jump in auto sales, sales of durable goods surged by a record 13.8% in October.
