Average spending per household rose 6.9% in 2005, the fastest clip since economic expansion resumed in 2001, according to an annual government survey. (Previous growth: 3.9% in '01, 2.9% in '02, 0.3% in '03, 6.3% in '04.) Incomes grew a healthy 7.8% in '05, helping fuel spending. Housing costs soared 9%, driven by higher mortgages, taxes and rental costs. Housing accounted for 41% of the spending increase.
Focus on: Dow Jones Industrial Average
Stocks had been soaring when Fed Chairman Alan Greenspan rocked the market with two words in a speech Dec. 5, 1996: When does "irrational exuberance" lead to a crash?1 But the market shook off the warning, and the Dow soared 5,500 points before the bubble burst in 2000. It tumbled 4,700 points to a post-bubble nadir in 2002, but exuberance returned in ’03. The Dow this fall broke new records; it’s near twice the level of 1996.
Last Week's Score
The AdMarket slumped on fresh worries about a weakening economy and rising inflation. Google pulled back from late November's record $513.