Bleak economic picture emerges from new data

Christopher S. Rugaber
Associated Press
December 25, 2008

WASHINGTON (AP) — A series of gloomy economic reports Wednesday showed consumers holding tight to their wallets with job losses expected to mount in the months ahead.

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There was one glimmer of good news, however. Lower gas prices and widespread holiday discounts are giving consumers greater buying power. Consumer spending, when adjusted for those price drops, rose last month after five months of declines, the Commerce Department said.

Late Wednesday, the Federal Reserve granted a request by the financing arm of General Motors to tap the government’s $700 billion rescue fund, bolstering GM’s ability to survive.

The Fed said it had approved GMAC Financial Services’ request to become a bank holding company. That designation makes GMAC eligible to receive a portion of the bailout fund and get emergency loans directly from the Fed.

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