year U.S. Treasuries fell 7/32 to yield 4.33 percent, which was up 0.03 percentage point from Thursday. The dollar finished lower against most major currencies. Based on U.S. interest-rate futures, the market has fully priced in a quarter percentage point rate hike by the Fed at its November policy meeting, which would push the key fed funds rate to 4.00 percent. The latest data also boosted the market's expectations of another quarter point rate rise in December. Last week, the Fed raised the fed funds rate a quarter point for the 11th time since June 2004 to 3.75 percent. In the coming months Katrina, which devastated parts of the U.S. Gulf, may also mean less consumer spending, which accounts for two-thirds of U.S. economic activities. The University of Michigan's consumer confidence index finished September at 76.9, unchanged from the initial reading in early September. Economists had predicted the consumer index would end at 78.00 against August's final reading of 89.10. The Commerce Department said income in August decreased 0.1 percent as rental and proprietors' income fell. Hurricane Katrina, which slammed into the U.S. Gulf Coast on Aug. 29, likely shaved those two measures by a combined $100 billion annualized due to uninsured property losses, it said. But the hit to income was offset to the tune of $70 billion as insurance benefit payments rose after the storm. Although spending proved weaker than expected in August as auto purchases plummeted, the decline followed two months in which consumers spent freely and economists said the fall was not particularly troubling. The spending decline pushed up the saving rate, the percentage of disposable income saved, to negative 0.7 percent from July's record low of minus 1.1 percent. A negative saving rate shows U.S. consumers eating into their accumulated wealth to spend.
