Business news with words economy+inflation+recession. 21 news.

CONSUMER spending in the United States rose more than forecast in November, allaying concern that the slowest shopping season in five years may have already pushed the economy into recession. Purchases gained 1.1 percent after a 0.4 percent increase in October that was more than previously estimated, the US Commerce Department said on Friday in Washington, according to Bloomberg News. Incomes also advanced, while the Federal Reserve's preferred measure of inflation accelerated. While the gain in November spending was the biggest in more than two years, it preceded reports by retailers that warned of a slump in purchases. A private report on Friday showed consumer confidence slid to the lowest level in more than two years in December. Economists forecast spending would rise 0.7 percent, after an originally reported 0.2 percent increase in October.

Personal consumption climbed by 1.1% in November, a sign the economy might not be as weak as feared, while the key core PCE gauge of inflation rose 2.2%, above the Fed's comfort zone.

The stock market swings wildly. Inflation is heating up, credit is tight and the economy may fall into recession. It's enough to make Americans want to hide their money under the mattress.

NEW YORK -- The stock market goes up 200 points one day, and down 200 the next. Inflation is heating up, credit is tight and there's talk that the economy may fall into recession.

UNITED States stocks have had the biggest weekly decline in a month after a Federal Reserve interest-rate cut and the biggest coordinated effort since 2001 to provide banks with cash failed to assuage concern that the economy will contract. Washington Mutual Inc led banks, brokerages and other financial firms to the steepest decline among 10 industries in the Standard & Poor's 500 Index. Circuit City Stores Inc, Sears Holdings Corp and Amazon.com Inc retreated on speculation that holiday sales at retailers will fall short of estimates, Bloomberg News said. Shares declined even after central bankers in North America joined those in Europe to inject money into the financial system and alleviate gridlock in credit markets. Reports that showed accelerating inflation caused concern that the Fed will be unable to cut interest rates more to prop up growth. "A recession is in the works," Andy Engel, who helps run the US$1.81 billion Leuthold Core Investment Fund that has

U.S. stocks had their biggest weekly decline in a month after a Federal Reserve interest rate cut and the biggest coordinated effort since 2001 to provide banks with cash failed to assuage concern the economy will contract.

Energy costs' effects on inflation and consumer spending hint at both recession and resiliency. Soaring energy costs helped fuel a record jump in wholesale inflation and an unexpectedly strong gain in retail sales, government reports showed Thursday, sending mixed signals about the state of the economy.

WALL Street pulled back yesterday as investors, uneasy about a drop in consumer confidence, traded cautiously ahead of the Federal Reserve's impending decision on interest rates. After the Fed's half-point reduction in September, most investors expect the central bank to deliver a quarter-point cut at the conclusion of its two-day meeting today. But inflation remains a threat. Crude oil prices fell yesterday, but only after hitting a record a day earlier, and meanwhile, the dollar has been tumbling. So a rate cut, much less additional decreases in the coming months, is not a given. Some on Wall Street fear economic growth could halt if rates aren't lowered, given the troubles in housing and credit. The statement the Fed issues alongside its rate decision will be closely read for clues about future moves. "We don't think the economy's about to slip into recession. The corporate portion of the economy is still in pretty good shape," said Phil Orlando, chief equity

Wall Street advanced Monday as investors undeterred by record oil prices speculated that the Federal Reserve will cut interest rates later this week to boost the slow economy and lure more buyers into the troubled credit markets. The Fed begins its two-day meeting today, and the market widely expects a rate reduction the following day. Central bankers lowered rates by a half-point in September for the first time in four years after the credit markets seized up and posed the threat of recession. The economy has a hard time growing if companies can't borrow and lend money. But with energy prices soaring to new records, the risk of inflation -- which tends to accelerate when rates are low -- may give policymakers some pause. Crude oil futures soared above $93 a barrel for the first time on the New York Mercantile Exchange on Monday after a storm led Mexico's state oil company to suspend about a fifth of its oil production. The Fed remains concerned about inflation but is likely to lower the target federal funds rate by a quarter-point due to overriding credit worries, said Scott Wren, equity strategist for A.G. Edwards & Sons. "It's kind of a psychological sort of move," Wren said. "A 25 basis-point cut isn't going to ease the credit crunch. But it'll give the Fed a little more time to figure out what's going on with the economy."

WALL Street advanced yesterday as investors undeterred by record oil prices speculated that the Federal Reserve will cut interest rates later this week to boost the slow economy and lure more buyers into the troubled credit markets. The Fed begins its two-day meeting today, and the market widely expects a rate reduction the following day. Central bankers lowered rates by a half-point in September for the first time in four years after the credit markets seized up and posed the threat of recession. The economy has a hard time growing if companies can't borrow and lend money. But with energy prices soaring to new records, the risk of inflation, which tends to accelerate when rates are low, may give policy makers some pause. Crude oil futures soared above US$93 a barrel for the first time on the New York Mercantile Exchange yesterday after a storm led Mexico's state oil company to suspend about a fifth of its oil production. The Fed remains concerned about inflation but is

NEW YORK - Wall Street advanced Monday as investors, undeterred by record oil prices, speculated that the Federal Reserve will cut interest rates this week to boost the economy and lure more buyers into the troubled credit markets. The Fed begins its two-day meeting today, and the market widely expects a rate reduction on Wednesday. Central bankers lowered rates by a half-point in September after credit markets seized up and posed the threat of recession. But with energy prices soaring to new records, the risk of inflation -- which tends to accelerate when rates are low -- may give policyma

PRICES paid by US consumers rose more than forecast in September as food and energy costs climbed, while the core measure that excludes those items showed inflation remains contained. The 0.3-percent gain followed a 0.1-percent decline in August prompted by falling oil prices, the Labor Department said yesterday in Washington. So-called core prices rose 0.2 percent for a second month in line with forecasts. With inflation under control, Federal Reserve policy makers have leeway to consider cutting their benchmark rate again later this month to keep the economy growing in the face of a deepening housing recession. Fed Chairman Ben S. Bernanke this week reiterated the central bank would "act as needed" to foster sustainable growth along with price stability, Bloomberg News said. "A slower economy and additional slack in the labor market should help keep inflation under control," Ethan Harris, chief economist at Lehman Brothers Holdings Inc in New York, said

SALES of Treasuries may increase for the first time since 2004 as the United States federal budget deficit expands, jeopardizing the biggest bond rally in five years. Government auctions of bills, notes and bonds in the fiscal year that started this month may rise more than 50 percent to US$220 billion, according to UBS Securities LLC, one of the 21 primary dealers that underwrite Treasury auctions. The first decline in corporate tax revenue since 2003 increased the shortfall by 12 percent to US$162.8 billion for the year ended in September, from US$144.8 billion in the 12 months through April, Bloomberg News reported. With the Federal Reserve cutting interest rates to keep the economy from falling into recession and inflation slowing, an increase in net sales would mar an otherwise bullish outlook for US government debt, which has returned 4.3 percent this year, Merrill Lynch & Co index data show. Less than six months ago, Treasury officials credited a shrinking deficit for

Retail sales rose solidly in September while a key inflation gauge remained muted, data Friday showed, suggesting the economy ...

For the first time since 1995, the U.S. bond market is rallying on the assumption that the Federal Reserve has relegated inflation to a secondary concern because the central bank views a recession as a much greater threat to the economy.

COMMODITIES had the biggest monthly gain in September in 32 years, led by wheat, crude oil and gold, as the US dollar's slump enhanced the appeal of energy, grains and precious metals as a hedge against inflation. The 19-commodity Reuters/Jefferies CRB Index was up 8.1 percent last month, the most since July 1975. Wheat climbed to a record in September amid a global grain shortfall, boosting corn and soybeans. Oil also hit a record, and gold reached a 27-year high. The Federal Reserve cut borrowing costs to bolster the American economy, sending the US dollar tumbling. "The Fed has signaled pretty clearly that (it) will answer the problem of a slowing economy with greater liquidity," said Chip Hanlon, who manages US$1 billion at Delta Global Advisors Inc in Huntington Beach, California. "We're in a bullish phase for commodities." The CRB Index rose to 333.67 from 308.76 on August 31. Wheat reached a record US$9.5125 a bushel on Friday. Crude oil climbed to US$83.90 a barrel, the highest ever, on September 20 and approached the record on Friday. Gold rose as high as US$752.80 an ounce on Friday, the highest since January 1980. The US dollar fell to a record against a weighted basket of six major currencies, including the euro, yen and pound. The Fed on September 18 cut its benchmark rate by 0.5 percentage point, more than economists forecast, to 4.75 percent in an attempt to shore up an economy threatened by a housing recession, according to Bloomberg News. The rate cut sparked inflation concerns. Some investors buy commodities to hedge against rising consumer prices, and the falling dollar makes raw materials priced in the United States currency cheaper for buyers holding other currencies. The cut in US borrowing costs will continue to weaken the dollar and lead to "skyrocketing" prices for commodities, Jim Rogers, chairman of Beeland Interests Inc, said in an interview last week. He co-founded the Quantum Hedge Fund with George Soros in the 1970s. Wheat rose on Friday after the US Department of Agriculture said US production and supplies were smaller than analysts expected. Global inventories are poised to decline to the lowest level in 26 years. Wheat futures for December delivery rose six US cents, or 0.6 percent, to US$9.39 a bushel on the Chicago Board of Trade. The price was up 22 percent this month and has more than doubled in the past 12 months.

Consumer spending was strong in August in spite of the credit squeeze and market turmoil, while inflation fell, in a hopeful sign for the US economy's ability to avoid a recession

Does the latest financial crisis signal the end of a golden age of stable growth? IF ECONOMICS were a children's tale, a long period of rising incomes and improving living standards would always be followed by a big, bad recession. Rising unemployment, falling spending and contracting output--such is the inevitable reckoning for the good times of plentiful jobs and abundant earnings that went before. The hangover needs to be commensurate with the party. No country has had it quite so good as America. For the past 20 years or more its economy has managed an enviable combination of steady growth and low inflation. To add to its good fortune, spending has routinely exceeded its income--leading to a persistent current-account deficit--without any apparent ill effects on the economy. The occasional setbacks have been remarkably small by historical standards. At the start of 1991, for instance, America's GDP fell for a second successive quarter (a common definition of a recession). But output soon recovered and by the end of the year had surpassed its previous peak. The next downturn, in 2001, was shallower still, with GDP dipping by less than half a percent.

The U.S. economy and credit markets got a welcome -- and surprisingly strong -- jolt from the Federal Reserve on Tuesday, as the central bank sliced two key short-term interest rates by a half a point. That's more than most optimists had expected. Wall Street responded with the biggest rally in the Dow Jones industrial average in more than four years. The Fed now seems clearly on the side of bolstering the economy, putting fears of inflation on hold -- at least for the time being. The central bank could take some of the scare out of Halloween with another round of interest rate cuts when it m

We could be on the cusp of a big recession, as Paul B. Farrell argues. We could be coasting into a soft landing in which economic growth merely slows and then picks up again somewhere down the line, as some economists contend. We could still even be in the Goldilocks economy in which jobs are plentiful and inflation low and all those nasty things you hear about mortgages and credit will blow away like a brief summer shower, as ... well, it seems only the White House wants to embrace that view.