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US Releases Downbeat Economic Reports; Senate Considers Economic Stimulus Plan


The government published more disappointing reports on the U.S. economy Thursday, while the Senate is considering plans to stimulate economic growth.

A Commerce Department report says consumer spending edged up just two-tenths of a percent in December, which is much less than the prior month. The report worried investors because consumer demand drives most U.S. economic activity.

A Labor Department report says the number of people applying for unemployment compensation shot up sharply by 69,000 to a total of 375,000.

The steady stream of bad economic news is prompting the Senate to consider various plans to stimulate the economy.

A Senate committee passed one version Wednesday that would give tax rebates between $500 and $1,000 to all but the richest taxpayers, and extend unemployment benefits.

A less expensive approach was passed by the House of Representatives on Tuesday. It covers fewer taxpayers but offers larger rebates in some cases.

Wednesday, the U.S. central bank cut the key interest rate for the second time in just nine days in an attempt to help the struggling U.S. economy.

Some information for this report was provided by AFP, AP and Reuters.

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