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Zimbabwe slashed 12 zeros from its currency as hyperinflation continued to erode its value, the country’s central bank announced Monday.

“Even in the face of current economic and political challenges confronting the economy, the Zimbabwe dollar ought to and must remain the nation’s currency, so as to safeguard our national identity and sovereignty. … Our national currency is a fundamental economic pillar of our sovereignty,” said Gideon Gono, governor of the Reserve Bank of Zimbabwe.

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Investors worried about a deepening recession cherry-picked stocks Monday, sending tech shares higher and financials and blue chips lower. The Dow Jones industrials were down more than 100 points, but the tech-laden Nasdaq composite index showed a modest gain. The market’s concerns were focused on two fronts: the economic stimulus proposal that is now before the Senate, and a possible plan to give further aid to the nation’s banks. Meanwhile, mostly negative economic data and news of more layoffs helped extend the gloomy mood that gave the market its worst January ever.

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Consumer spending fell for a record sixth straight month in December as recession-battered households, worried about surging layoffs, boosted their savings rates to the highest level since May.

Economists expect consumer spending, which accounts for the largest portion of total economic activity, to remain weak this year, prolonging an already painful recession.

The Commerce Department reported Monday that personal consumption spending dropped by 1 percent in December. That was slightly worse than the 0.9 percent decline economists expected. The government also revised its November estimate lower to show spending fell 0.8 percent rather than 0.6 percent in that month.

Incomes, reflecting a wave of layoffs, fell for a third straight month, but the 0.2 percent drop was slightly better than expected. The decline in November, however, was revised to show incomes dropped 0.4 percent, double the initial estimate.

Still, Americans worried about the possibility of more job cuts boosted their savings rate to 3.6 percent of their after-tax incomes in December. That was the highest level since tax rebate checks temporarily pushed the rate up to 4.8 percent in May.

For the year, consumer spending rose by just 3.6 percent, the smallest annual increase since 1961. Incomes rose by 3.7 percent, the weakest gain since a 3.2 percent advance in 2003.

The Federal Reserve will provide a reading of just how bad the credit crunch is later Monday with the release of its latest survey showing how many banks are tightening their lending standards for consumers and businesses.

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