Issue link: https://www.epageflip.net/i/465892
The Associated Press WASHINGTON In recent months, the stage seemed set for American consumers to do what they've tradition- ally done best: Spend money — and drive the economy. The lowest gas prices in five years had given peo- ple more spending money. Employers added over 1 million jobs from Novem- ber through January, the best three-month pace in 17 years. Businesses even raised pay in December. Economists had forecast that last week's retail sales report for January would show a healthy rise. And yet — to the surprise of analysts — consumers held their wallets closely. Even though Americans spent $6.7 billion less at gas stations in January than they had two months ear- lier, the extra cash didn't get spent anywhere else: Retail sales, excluding gas, fell slightly from November to January. The unexpected pull- back provided evidence that drivers had used their extra money to further re- build their savings and re- duce their debts — a trend that began after the finan- cial crisis and recession. In the long run, deeper savings and shrunken debts benefit individual households — and, eventu- ally, even the economy as a whole, because they supply fuel for a sustained flow of future spending. For now, though, the slow- down in consumer spending likely means the economy will grow more slowly in the first quarter of the year than economists had previ- ously envisioned. Their fore- cast now is for annualized growth of 2.5 percent from January through March, down from an earlier esti- mate of about 3 percent. In the meantime, many Americans are finding more money in their pockets. In January, the national aver- age gas price fell to $2.03 a gallon, according to AAA, the lowest since 2009. Though the average has since risen to $2.24, it's still nearly $1.10 cheaper than 12 months ago. As a result, the typical household will have $750 more in hand this year, according to an esti- mate by the government's Energy Information Ad- ministration. RETAIL REPORT For many, cash saved at gas pump is staying in pockets By Michael Virtanen The Associated Press ALBANY,N.Y. UPS deprived New York of millions of dol- lars in revenue by shipping nearly 700,000 cartons of untaxed cigarettes from In- dian reservations to smok- ers statewide despite an earlier agreement to stop, according to a federal law- suit filed Wednesday. Attorney General Eric Schneiderman and New York City Corporation Coun- sel Zachary Carter are seek- ing $180 million from At- lanta-based UPS, saying the cheap cigarettes increased smoking by New Yorkers while also costing $29.7 mil- lion in lost excise tax reve- nue from the state and $4.7 million from the city. UPS denied it knowingly shipped cigarettes, saying it agreed in 2005 to stop deliv- ering cigarettes to consum- ers nationwide in a policy that exceeded requirements of federal and state law. The civil suit filed in Man- hattan claims UPS shipped unstamped cigarettes to and from "numerous" contra- band cigarette enterprises on Indian reservations in New York from 2010 to 2014, naming eight smoke shops or distributors. It seeks an injunction to halt the ship- ping along with damages and penalties for contra- band cigarette trafficking and additional damages for enterprise corruption. "UPS has deliberately turned a blind eye to the fact that millions of dol- lars' worth of untaxed cig- arettes are shipped each year through its facilities," Carter said. Authorities said the lawsuit was based on documents subpoenaed from the company. Schneiderman said in or- der to limit smoking, "the No. 1 preventable public health crisis today," officials have to stop the flow of ille- gal low-cost cigarettes. The suit cites federal reports showing smoking kills more than 400,000 people in the U.S. annually and that a 10 percent price increase cuts adult smoking by 3 to 5 per- cent and youth smoking by 6 or 7 percent. The state excise tax on cigarettes rose in 2010 from $2.75 to $4.35 for a pack containing 20. The city tax is $1.50 per pack. That's $58.50 altogether for a 10- pack carton. COURTS La ws ui t: N Y lo st m il li on s in cigarette tax due to UPS PaidAdvertisement VOTING IS UNDERWAY! Vote for your favorite Tehama County Businesses before Wednesday, February 25. OnlineBallotsOnlyat www.redbluffdailynews.com/bestof Five Lucky Voters will be selected at random from all eligible ballots on March 4. Each will receive a $100 Shopping Spree at the Tehama County business of their choice! | NEWS | REDBLUFFDAILYNEWS.COM THURSDAY, FEBRUARY 19, 2015 4 B