Nation digest 06/29/02

Consumer spending down slightly in May

WASHINGTON -- Consumers, key players in the economic recovery, trimmed their spending in May for the first time in six months, buying fewer cars and other big-ticket items.

The Commerce Department reported Friday that spending edged down by 0.1 percent in May, after rising by a solid 0.6 percent in April.

The pullback came as free financing and other incentives to motivate car buyers were scaled back and unusually cold weather chilled shoppers' appetites to hit the malls and buy seasonal merchandise, economists said.

"I think it is a temporary pause," said Lynn Reaser, chief economist at Banc of America Capital Management. "Consumer spending appears to have picked up in June."

U.S., Canada reach new border security deal

NIAGARA FALLS, Ontario -- Homeland Security adviser Tom Ridge and Canadian deputy prime minister John Manley announced an agreement Friday for improving security at the border.

In a progress report to be delivered to President Bush and Prime Minister Jean Chretien, Manley said the two countries had reached "a major breakthrough" with agreement on a joint project called Free And Secure Trade.

The program affords commercial vehicles a quicker entry provided their companies increase their supply chain security. Pre-authorized drivers and carriers of lower-risk shipments will use a dedicated lane.

FBI director speaks to American Muslim group

ALEXANDRIA, Va. -- FBI Director Robert Mueller thanked Muslim Americans on Friday for providing "substantive assistance" to the government investigation of the Sept. 11 attacks.

In a controversial appearance before the American Muslim Council, Mueller noted that some people associated with the group have made statements in the past that were supportive of terrorism.

But the FBI director said the organization has moved into the mainstream of American life and that "we must all be in this war ... together. A good relationship can only bear the fruit of a safer nation for us all."

Two rabbis held up signs protesting the FBI director's appearance and were ushered out of the meeting.

The American Muslim Council's former executive director has been quoted as expressing support for the terrorist group Hamas.

WorldCom begins laying off 17,000 workers

CLINTON, Miss. -- WorldCom Inc. began laying off 17,000 employees worldwide Friday after disclosing a huge case of crooked accounting that could force the nation's No. 2 long-distance company into bankruptcy.

The cuts account for about 20 percent of the work force at WorldCom, which operates in 65 countries.

WorldCom revealed Tuesday that its internal auditors had found that the company had hidden $3.8 billion in expenses. That means WorldCom may have lost millions of dollars when it reported profits.

On Friday, WorldCom eliminated about 1,300 jobs in Virginia, 1,000 in Texas, nearly 700 in Maryland and 500 in Colorado. In other states, the numbers ranged up to a few hundred.

-- From wire reports