Americans' personal income climbed in July but they spent less for the first time in more than two years.
The Commerce Department reported today that incomes rose by 0.5 percent in July, to a seasonally adjusted $7.14 billion.
Personal consumption expenditures, however, fell 0.2 percent -- the first decline since June 1996 -- to a seasonally adjusted rate of $5.8 billion.
Spending on durable goods -- expensive items from cars to computers expected to last three years or more -- dropped a dramatic 5.2 percent in July, offsetting smaller increases in spending for nondurable goods and services.
Declining purchases of motor vehicles more than accounted for the decrease in spending, the Commerce Department said. A strike at General Motors, not settled until the end of the month, may have affected dealers' inventories.
Wages and salaries, which account for more than half of Americans' income rose 6.0 percent in July, reflecting continued low unemployment.
3M plans to cut another 500 jobs
St. PAUL, Minn. (Bloomberg) -- Minnesota Mining and Manufacturing Co., a leading consumer and industrial products maker, boosted its previously announced job cuts by 500 to 4,500, or 6 percent of the company's total, as it closes factories and drops products to boost profits.
The maker of Post-it Notes and Scotch tape said Thursday the moves will result in a pretax charge of up to $500 million, probably in the third quarter, and will help produce "double-digit earnings growth" for the next three years.
Stock fund buying hits 7-year low
NEW YORK (Bloomberg) -- U.S. stock funds attracted the smallest amount of cash this month since the 1991 recession, according to an industry report, and many big companies reported Thursday that their equity funds had net withdrawals.
T. Rowe Price Associates Inc. and Charles Schwab Corp. said investors pulled money from equity funds, diverting cash to lower risk bond and money market funds amid heightened concern about slumping global markets. Vanguard Group was one of the few firms to report stock fund inflows.
"People aren't panicking, but there is growing concern about the impact that the financial crisis in Russia and Asia will have on the U.S. market," said Steven Norwitz, vice president at T. Rowe Price.
Industry-wide, funds investing in U.S. stocks took in about $1.1 billion this month through Tuesday, said Carl Wittnebert, an analyst at Trimtabs.com, which tracks fund flows. That would be the lowest one-month inflow since June 1991, when the economy was coming out of a recession.
Anheuser-Busch may hike beer prices
ST. LOUIS (AP) -- Beer drinkers may soon be paying a little more for their favorite brew, at least if that beer is made by Anheuser-Busch Inc.
The world's largest brewery is considering raising the price of some beers by just under 2 percent, Anheuser-Busch spokesman Bill Etling said Thursday. It would be the St. Louis-based company's first beer-price increase in two years.
Anheuser-Busch said it wouldn't be an across-the-board, nationwide increase. Each market will be assessed separately. The company did not say which beers would be affected.
In other business news . . .
The Treasury Department sold 15-day cash management bills on Thursday at an average discount rate of 5.45 percent.
The criminal trial of brothers Patrick and Michael Bennett, accused of swindling investors out of $700 million in a massive pyramid scheme, has been rescheduled again. The new date for the trial in U.S. District Court in New York City is Nov. 30.
Top executives at CUC International fraudulently inflated the company's income by $500 million from 1995 through 1997 in an effort to bring earnings into line with Wall Street expectations, a probe by Cendant Corp. found.
A federal judge Thursday refused to toss out a lawsuit in which PepsiCo Inc. accused the Coca-Cola Co. of trying to monopolize soft drink sales in the nation's theaters, restaurants and stadiums. The ruling by U.S. District Judge Loretta A. Preska permits Pepsi to go forward with its claim that Coke has violated antitrust laws by cornering the market for fountain drinks distributed through food service distributors.