Our muddy economy

AP:

Americans' savings rate fell to an all-time low in July while manufacturing showed signs of slowing in August, worrisome economic news amid uncertainty over how much of Hurricane Katrina will hit the economy.

A group of economic reports today showed the economy was buffeted by high oil prices even before Katrina shut down production along the Gulf of Mexico earlier this week and sent the price of gasoline and other products soaring.

The Commerce Department reported that consumer spending rose by 1 percent in July, matching a strong June gain, as Americans streamed into auto showrooms to take advantage of sales enticements.

However, incomes rose by just 0.3 percent, not enough to cover the increased spending. As a result, the savings rate fell into negative territory at minus 0.6 percent, the lowest level on record.