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Consumer Confidence and Spending Rise, Reports Show

November 4, 2012 by Leave a Comment

WASHINGTON (AP) — A flurry of reports on Thursday showed that American consumers were growing more confident and spending more, strengthening a still-weak economy just five days before the presidential election.

Consumer confidence surged in October to its highest level in nearly five years. Americans were encouraged by recent declines in the unemployment rate. And they responded by spending more on cars and trucks, at retail businesses and on goods produced in the nation’s factories.

Still, businesses remain nervous about where the economy is headed and that could affect hiring. The October jobs report, to be released Friday, is expected to show another month of tepid job growth. Hurricane Sandy could also slow economic growth slightly in the final months of 2012.

On Thursday the stock market welcomed the signs of improved economic health. The Dow Jones industrial average closed up 136.16 points, or 1.04 percent, at 13232.62, and broader indexes also increased.

“U.S. economic data are at least all moving in the right direction,” Robert Kavcic, an economist at BMO Capital Markets, said in a note to clients.

Reports released Thursday showed:

¶ The Conference Board’s consumer confidence index rose to 72.2 last month, its highest reading since February 2008. While the index is still below the 90 reading consistent with a healthy economy, it has risen from 40.9 a year ago. That is the biggest one-year increase since 1994, Mr. Kavcic said.

¶ Sales in retail stores open at least one year rose 5 percent in October, according to a tally from 21 retail chains by the International Council of Shopping Centers. That exceeded analysts’ predictions. Some of the increase may reflect higher spending for generators, batteries, water and other supplies in preparation for Hurricane Sandy.

¶ Manufacturing expanded for the second straight month, largely because of higher consumer demand. The Institute for Supply Management, a private trade group, said its index of factory activity edged up to 51.7 in October, from 51.5 in September. A reading higher than 50 indicates expansion. Factory activity is growing again after contracting from June through August. The October reading was still slightly below the average for the last year of 52.2.

¶ Weekly unemployment applications fell 9,000 to 363,000 last week, according to the Department of Labor. That suggests hiring is unlikely to pick up much from its current pace of about 150,000 new jobs a month.

¶ A report by the payroll provider ADP showed that businesses added 158,000 jobs in the last month, up from 114,000 in the previous month. ADP updated its method for the October report. It has frequently diverged sharply from the government’s figures.

¶ Auto sales also rose in October, even though the storm caused dealers on the East Coast to lose three days of business. Toyota sales rose almost 16 percent, Chrysler’s 10 percent and General Motors was up 5 percent. Ford sales increased only slightly, 0.4 percent.

¶ Construction spending rose 0.6 percent in September, the Commerce Department said. A healthy gain in spending on home construction and renovation outpaced declines in commercial and government building.

¶ Manufacturing in China also improved in October, although the two surveys released Thursday show factory activity in the region was still struggling to grow. The reports are rare good news for the world economy, which has weakened because of Europe’s debt crisis and slower growth in emerging markets such as China, India and Brazil.

The United States economy expanded at a 2 percent annual pace in the July-September quarter, up from 1.3 percent in the second quarter.

Many economists predict slightly slower growth in the fourth quarter, partly because of disruptions from the storm. Still, the economy is not growing fast enough to bring relief to the roughly 12 million jobless Americans soon. With the unemployment rate still high, steady growth of more than 3 percent is generally needed to create enough jobs.

Article source: http://www.nytimes.com/2012/11/02/business/economy/claims-for-us-jobless-benefits-drop.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: , ,

Confidence Rises Sharply, but Home Prices Fall

December 27, 2011 by Leave a Comment

A monthly survey released Tuesday shows consumers’ confidence in the economy in December surged to the highest level since April and was near a post-recession peak.

But a separate private report said home prices in most major cities in the United States fell for the second straight month in October.

The New York-based Conference Board said that its Consumer Confidence Index rose almost 10 points to 64.5, up from a revised 55.2 in November. Analysts had expected 59.

The surge builds on another big increase in November, when the index rose almost 15 points from the month before.

Improving confidence is in line with retail reports of a decent holiday shopping season. Still, the December confidence reading is below the 90 level that indicates an economy on solid footing.

Economists watch the confidence numbers closely because consumer spending — including items like health care — accounts for about 70 percent of economic activity in the United States.

Still, the Standard Poor’s/Case-Shiller index showed prices dropped in October from September in 19 of the 20 cities tracked, reflecting the typical autumn slowdown after the peak buying season.

Prices in a majority of cities declined for the second straight month. Before that, they had risen for five consecutive months in at least half of the cities tracked.

Atlanta, Detroit and Minneapolis posted the biggest monthly declines. Prices in Atlanta and Las Vegas fell to their lowest points since the housing crisis began.

Prices rose in Phoenix after three straight monthly declines.

The Case-Shiller index covers cities that hold half of all homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The monthly data are not seasonally adjusted.

David M. Blitzer, chairman of S.P.’s index committee, said steep price drops in cities such as Atlanta, Chicago, Cleveland, Detroit and Minneapolis were particularly worrisome because their gains earlier this season were strong.

“Atlanta and the Midwest are regions that really stand out in terms of recent relative weakness,” Mr. Blitzer said. “These markets were some of the strongest during the spring/summer buying season.”

Americans are generally reluctant to purchase a home more than two years after the recession officially ended. High unemployment and weak job growth have deterred many would-be buyers. Even the lowest mortgage rates in history haven’t been enough to lift sales.

Sales of previously occupied homes are barely ahead of 2008’s dismal figures, which were the worst in 13 years. And sales of new homes this year will likely be the lowest since the government began keeping records a half century ago.

Article source: http://feeds.nytimes.com/click.phdo?i=187edab596b23720ec735a7424bf734e

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Stocks Flat on Wall Street After Mixed Data

August 30, 2011 by Leave a Comment

Stocks on Wall Street dipped early on Tuesday after new reports showing a mixed economic recovery, but they then recovered some ground, putting the Dow Jones industrial average on track to break even for the year so far.

The United States markets were digesting a full agenda of economic data.

Residential real estate prices in the United States were higher by 3.6 percent in the second quarter of 2011, according to the Standard Poor’s/Case-Shiller national home price index. But it showed an annual decline of 5.9 percent when compared with the second quarter of 2010. Home price levels for June 2011 were below those of June last year.

In addition, the Conference Board consumer confidence index fell to 44.5 in August from 59.2 in July. But analysts noted that such data often has a temporary effect on the markets.

“The consumer confidence survey was decidedly negative but the effect of that should wear off as we go forward,” said Russell Price, the senior economist with Ameriprise Financial.

Joshua Shapiro, chief United States economist at MFR Inc., noted that the consumer confidence index was at its lowest level in more than two years, since a level of 40.8 in April 2009.

By noon, the Dow and the Standard Poor’s 500-stock index were marginally higher, while the Nasdaq composite index was up 0.5 percent.

Stocks on Wall Street had surged on Friday, propelling indexes closer to covering their shortfalls for the month and the year. By Monday, the Dow Jones industrial average had closed to within 38 points of where it started the year.

Investors were also anticipating the release of the Federal Reserve minutes on Tuesday afternoon and, on Friday, the national jobs report.

The Fed minutes are likely to give the markets a more information about the central bank board’s last meeting on Aug. 9, in which three members dissented on a vote that promised two more years of low rates. It was the first time in almost 20 years that at least three members recorded votes in dissent.

Financial and energy stocks were down by more than 1 percent each in early trading.

Exxon Mobil, which signed an agreement on Tuesday with Russia’s top crude oil producer, Rosneft , declined 1.32 percent and was the most widely traded share on the energy index.

Oil prices were slightly higher. Crude futures for October, traded in New York, were up slightly at $88.16 a barrel. Spot gold was more than 2 percent higher at $1,828.45 an ounce.

The benchmark 10-year Treasury bond yield fell to 2.173 percent, from 2.257 percent late on Monday.

Article source: http://www.nytimes.com/2011/08/31/business/daily-stock-market-activity.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,