Reply #130: BBC: US consumers reel at fuel hikes

[UpInArms]

http://news.bbc.co.uk/1/hi/business/4297846.stm

The US economy is feeling the twin impact of soaring energy prices and Hurricane Katrina, with both consumer spending and confidence falling.

Consumer spending fell 0.5% in August - the largest monthly fall in nearly four years - reflecting the recent rise in gasoline and domestic fuel prices.

Gasoline climbed above $3 a gallon for the first time after Hurricane Katrina.

And the government estimated that the hurricane destroyed uninsured property worth $100bn in four Southern states.

Meanwhile, consumer confidence, as surveyed by the University of Michigan, dropped by more than expected in September.

The index of consumer sentiment dropped to 76.9 in September, from 89.1 in August, the biggest drop in two years.

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