USA

Consumer spending and personal income were essentially flat in May, the government reported, releasing the data as Federal Reserve policymakers gathered to order another expected quarter-point rise in interest rates. The Commerce Department said personal income grew in May by 0.2 percent, after a 0.6 percent increase in April. Spending neither rose nor fell, after growing by 0.4 percent in April. Economists surveyed by Reuters predicted that the Fed almost certainly would hike the rate for over-night borrowing among banks to 3.25 percent, because weak indicators are offset by the soaring price of oil. They also forecast another interest rate increase when the Fed's Open Market Commitee meets again in August.

Time magazine agreed to yield subpoenaed documents in the Valerie Plame case to a grand jury, a move that could keep one of its reporters out of jail. The publication said it had decided to hand over the documents "in accordance with its duties under the law." On Wed-nesday, a judge in Washington gave Time's Matthew Cooper and Judith Miller of The New York Times one more week to reveal their confidential sources to the grand jury investigating the leak of CIA official Plame's identity. Two days earlier, the Supreme Court let stand a ruling that both should be jailed for four months for refusing to cooperate.

Local police were advised to remain vigilant over the Independence Day weekend, even though there have been no specific or credible threats of terrorist attacks, the FBI said. The bureau nonetheless warned that large gatherings, such as at parades and fireworks displays, offer ready targets. One of the largest celebrations is scheduled in Philadelphia, where a Live 8 concert will be staged Saturday and where the USS Cole, the Navy destroyer attacked by terrorists in Yemen five years ago, is to make a port call.

Five Democratic Party officials were found guilty of election fraud by a federal jury in East St. Louis, Ill. - among them the local chairman. The defendants were accused of attempting to buy votes for their party's candidates last November with cash, cigarettes, and liquor. Although the defendants weren't immediately sentenced, each count carries a penalty of up to five years in prison and a fine of $250,000.

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