Consumer Spending Takes Big Hit ; Deepest Tumble Since 9/11 Blamed On Hurricane Katrina

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WASHINGTON - Consumer spending plunged in August at the steepest rate since the September 2001 terrorist attacks as Hurricane Katrina slashed Americans' incomes, fanned inflation and caused $170 billion in losses from property damage, the government reported Friday in its first tally of the storm's economic effects.

The report came a day after the Labor Department said 279,000 Americans have filed new claims for unemployment insurance benefits because of Katrina, which slammed into the Gulf Coast on Aug. 29, wrecking homes and businesses, driving up energy prices and forcing a mass evacuation.

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Consumer Spending Takes Big Hit ; Deepest Tumble Since 9/11 Blamed On Hurricane Katrina

With energy prices still high, savings low, interest rates ris...

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