Consumer Spending

If the money comes, they will spend it. Most taxpayers in Southern California would be eligible for tax rebates under the economic stimulus plan drafted in Washington on Thursday. Many, it seems, would cash their checks and head to the mall. "I'm not just going to go out and blow it, but it's unexpected, and that's a pretty good amount of money," said Adam Finer, a 36-year-old lighting technician from Burbank.

U.S. spending on housing fell in the fourth quarter by the most in 26 years as the residential real estate slump started to curtail consumer spending. Residential investment, the money spent on construction, renovation and broker fees associated with sales, dropped 24% in the period, the biggest decline since the fourth quarter of 1981, according to the U.S. Department of Commerce.

Buffeted by soaring fuel prices and tighter credit, Americans increased their spending at the weakest pace in six months. In other signs of trouble, applications for jobless benefits last week soared to their highest number since Hurricane Katrina. The Commerce Department reported Thursday that consumer spending edged up just 0.2% in December -- the year's peak shopping season. That was down from a 1% gain in November. It was the weakest performance since a similar 0.

The U.S. housing market has still not reached bottom, the number of workers drawing jobless benefits has hit a 2 1/4 -year high and consumers are tightening their purse strings, reports showed Thursday, suggesting that the economy may have screeched to a halt. Pending sales of previously owned homes fell 1.5% in December and were off a sharp 24% from a year earlier, the National Assn. of Realtors said.

Consumer spending slowed to a crawl in January, with retail sales at major chains rising just 0.5% in what was by one measure the month's worst performance in nearly 40 years, according to reports released Thursday. Evidence of consumer caution came from both ends of the marketplace. Discounter Wal-Mart Stores Inc. said shoppers held on tight to the gift cards they received over the holidays or used them to buy milk and bread rather than toys or iPods. High-end Saks Inc.

About 20 million Social Security recipients and other Americans who aren't required to file tax returns will need to do just that if they want to get rebate checks under the economic stimulus package signed into law Wednesday. The Internal Revenue Service said it would conduct a sweeping program to publicize the requirement to file a return, but some experts said many people eligible for rebates would fall through the cracks.

Sun Valley legal secretary James Eric Freedner got fed up with high gasoline prices. He put his 2003 Toyota Tacoma truck in the garage and switched to a Honda Nighthawk motorcycle for weekday commutes to Beverly Hills. He stopped driving to the beach on weekends and cut back on trips to Hanford and Fresno to check on properties he manages. He began grouping errands into one trip each Saturday.

Wall Street will face a slew of data this week: on Americans' spending, inflation at the producer level, home sales and manufacturing. So far this year, economic data have been mixed but worrisome, and that has made for a turbulent stock market. And investors are bracing for more of the same for some time to come. Last week, the Dow inched up 0.3%, the Standard & Poor's 500 index rose a modest 0.2% and the Nasdaq composite index slipped 0.8%.

The government said Friday that Americans spent more in January, not because they bought significantly more goods and services but because they paid more for what they did purchase. Consumer spending, which accounts for two-thirds of all economic activity, rose 0.4% in January from December, the Commerce Department said. That would normally be greeted as good news, demonstrating that people were buying things they wanted while powering the economy forward.

U.S. consumers cut spending in February and the labor market continued to weaken, suggesting the household-spending pillar that had supported the economy's expansion might be giving way. Retail sales unexpectedly declined 0.6% last month, and the ranks of workers remaining on state unemployment benefit rolls hit the highest level in nearly 2 1/2 years in late February, government data showed. Now the credit crunch is settling in on Main Street.