WKYT | Lexington, Kentucky | News

Economy sends numerous signals of rebound

WASHINGTON (AP) - Consumer spending is showing signs of life but the key question as the economy transitions from recession to recovery is, how much?

U.S. households face rising employment, tight credit conditions and other obstacles but economists believe that consumer spending, which accounts for about 70 percent of total economic activity, surged in August. One reason could be the success of the government's Cash for Clunkers car rebate program.

The Commerce Department is scheduled to report on consumer spending for August on Thursday. In advance of that report, economists surveyed by Thomson Reuters expect that spending surged 1.1 percent, up from the 0.2 percent rise in July.

While layoffs have slowed, they have not stopped, and many workers remain fearful about what the future holds.

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