NEWSMAKERS

CONSUMER SPENDING Consumer spending fell for a record sixth straight month in December as recession-battered households, worried about surging layoffs, boosted their savings rates to the highest level since May. The Commerce Department reported Monday that personal consumption spending dropped by 1 percent in December. That was slightly worse than the 0.9 percent decline economists expected. Incomes, reflecting a wave of layoffs, fell for a third straight month, but the 0.2 percent drop was slightly better than expected. Still, Americans worried about the possibility of more job cuts boosted their savings rate to 3.6 percent of their after-tax incomes in December. For the year, consumer spending rose by just 3.6 percent, the smallest annual increase since 1961. Incomes rose by 3.7 percent, the weakest gain since a 3.2 percent advance in 2003. MANUFACTURING A key gauge of manufacturing activity edged up slightly in January but still showed contraction for the 12th straight month. The Institute for Supply Management said its manufacturing index rose to 35.6 in January from an all-time low of 32.9 in December. Any reading below 50 indicates contraction in the sector. MACY’S Macy’s Inc. announced Monday that it will cut 7,000 jobs, almost 4 percent of its work force, reduce its contributions to its employees’ retirement funds and slash its dividend to preserve cash amid a severe pullback in consumer spending. The Cincinnati-based department store chain also delivered bleak earnings and sales forecasts for the year. Macy’s said it expects to earn between 40 cents and 55 cents, excluding one-time costs, for the year that ends next January. The company also slashed its quarterly dividend to 5 cents from 13.25 cents. The dividend will be paid on April 1 to shareholders of record March 13. CHRYSLER A union official said Chrysler LLC is offering another round of buyout and early retirement packages to hourly workers in an effort to replace them with new hires who would earn less money. Chrysler production workers who are represented by the United Auto Workers union make about $29 per hour. Under a contract reached last year, the company can pay some replacement workers $14 per hour and give them less-costly health care and retirement benefits. As a condition of the federal loan Chrysler received, the Auburn Hills, Mich., company must make efforts to bring its labor costs in line with those at foreign automakers’ U.S. plants. BANKS The Federal Reserve in its quarterly survey of bank lending practices released Monday found large numbers of banks reporting tighter credit standards across a broad range of loan products — from credit cards and home mortgages to business loans. Nearly 60 percent of banks responding to the survey said they had tightened lending standards on credit card and other consumer loans. And about 80 percent of domestic banks said they tightened lending standards on commercial real-estate loans. –AP