percentage point to 4.5 percent on Tuesday, the final day of Alan Greenspan's 18-1/2 year tenure as chairman. Some analysts think the rate hike, which would be the 14th consecutive increase, may mark the end of a 19-month credit-tightening campaign. Markets, however, see better than even odds of a small increase at the next meeting in March. A separate report showed manufacturing activity in the U.S. Midwest held steady last month. The Chicago Fed said its manufacturing index came in at 112.4 in December, the same as November's upwardly revised reading. The report on income and spending showed purchases of cars and other long-lasting manufactured goods climbed 4.8 percent in December. Shoppers appeared to be getting bargains as prices of these pricey durable goods fell 0.2 percent. "The consumer is still alive and well despite softening of the housing market," said David Powell, an analyst at IDEAglobal in New York. Rising home prices have been a source of inexpensive capital for U.S. consumers as borrowers refinanced at low interest rates and tapped equity, allowing spending to advance more quickly than income. But with the housing market showing signs of a slowdown amid higher mortgage rates, some economists see the lack of saving as an economic Achilles' heel and warn that consumer spending could falter. Others, however, say expanding employment and higher levels of business spending should offer support to the economy. "Further gains in employment combined with better levels for consumer confidence overall are setting the stage for very solid consumption gains in the first quarter of 2006," said Brian Bethune, U.S. economist at Global Insight in Lexington, Massachusetts.
