December 13, 2019

Rise Reported in Factories and Consumer Confidence

Manufacturing grew in February at the fastest pace in 20 months, according to a report from the Institute for Supply Management. And a survey from the University of Michigan showed that consumer sentiment rose last month to its highest level since November.

Other data showed strength in job growth and the housing market. Americans spent a bit more in January compared with December, despite a sharp drop in income that partly reflected higher taxes.

“Consumers are spending, confidence is rising and manufacturing activity is accelerating,” Joel Naroff, president of Naroff Economic Advisors, said in a note to clients. “Just about all of today’s reports point to an economy on the rise.”

Businesses and consumers appear to be shrugging off changes in federal policy that will probably slow the still-weak economy.

In January, Congress and the White House struck a deal that raised income taxes on the nation’s top earners but also allowed a temporary cut in Social Security taxes to expire.

Across-the-board spending cuts were set to begin Friday. The cuts could reduce government purchases and lead to temporary layoffs of government employees and contractors. The reductions were expected to shave about a half-percentage point from economic growth this year.

The economic data Friday was mostly positive.

The Institute for Supply Management said its index of factory activity rose last month to 54.2, the highest since June 2011, from 53.1 in January. Any reading above 50 indicates growth. The report showed a jump in new orders, higher production and more hiring at factories. Manufacturing has grown for three consecutive months, indicating that factories could help the economy after slumping through most of 2012.

Separately, the Thomson Reuters/University of Michigan consumer sentiment index rose to 77.6, the second consecutive monthly increase, from 73.8 at the end of January. The rebound suggests that some people have begun to adjust to smaller paychecks stemming from the restoration of the full Social Security tax.

The Commerce Department reported that consumers increased spending 0.2 percent in January from December but cut back on big purchases like cars and appliances. Income plunged 3.6 percent, though it followed a jump in December driven by dividends and bonuses that were paid early to avoid higher income taxes.

In a separate report, the Commerce Department said that spending on construction projects fell in January by 2.1 percent, the largest amount in 18 months. But the decline followed a nearly 10 percent increase in construction spending in 2012, the first annual gain in five years.

Article source: http://www.nytimes.com/2013/03/02/business/economy/americans-spend-more-and-make-less-data-shows.html?partner=rss&emc=rss

Looking Ahead: Economic Reports for the Week of Nov. 5

ECONOMIC REPORTS Data to be released will include I.S.M. service for October (Monday); consumer credit for September (Wednesday); weekly jobless claims and the trade deficit for September (Thursday); and import prices for October, wholesale trade for September and Thomson Reuters/University of Michigan consumer sentiment index (Friday).

CORPORATE EARNINGS Companies scheduled to release quarterly earnings include HSBC, Humana, Toyota MotorAOL, BMW, Cablevision, CVS Caremark, Dish Network, Nissan Motor, NYSE Euronext, Office Depot and News Corporation (Tuesday); Kraft Foods, Macy’s, Molson Coors, Time Warner, WellPoint, CBS and Qualcomm (Wednesday); Kohl’s, Siemens, Walt Disney, Groupon and Nordstrom (Thursday); and J.C. Penney (Friday).

IN THE UNITED STATES On Monday, a federal judge in Madison, Wis., will begin hearing testimony on Apple’s contention that Google breached its obligations to license so-called essential patents.

On Friday, the Agriculture Department will release its monthly report on crop supply and demand.

OVERSEAS On Monday, finance ministers and central bank officials from the Group of 20 will meet for a second day in Mexico City.

On Wednesday, Chancellor Angela Merkel of Germany will address the European Parliament in Brussels and the European Commission will publish new economic forecasts.

On Thursday, the European Central Bank and the Bank of England will issue interest rate decisions.

Article source: http://www.nytimes.com/2012/11/05/business/economy/economic-reports-for-the-week-of-nov-5.html?partner=rss&emc=rss

U.S. Stocks Slightly Higher

Before trading began, the Commerce Department said that both personal income and spending rose 0.4 percent in April, in line with what economists expected. Higher food and gas prices accounted for most of the spending increase.

A cut in the amount withdrawn from paychecks for Social Security has given incomes a boost this year. But that extra take-home pay has been pinched by higher prices for gasoline.

But the government’s figures do not account for the dip in gas prices in May because they lag by a month. The Thomson Reuters/University of Michigan Consumer Sentiment index, a closely watched measure of consumer confidence, rose to 74.3 in May, above analysts’ estimates of 70. Concerns about higher gas prices and inflation had knocked the gauge down in March and April.

“That’s what a 25-cent drop in gas prices will do,” David Ader, bond strategist at CRT Capital Group, wrote in an email to clients. At the close of trading, the Dow Jones industrial average was up 38.82 points, or 0.31 percent. The Standard and Poor’s 550-stock index rose 5.41 points, or 0.41 percent. The Nasdaq composite index was up 13.94 points, or 0.5 percent.

Markets are closed Monday for Memorial Day.

European and Asian stock markets mostly rose Friday as a recovery in commodity shares helped investors look past weak economic data from the United States and worries about Greece’s debt troubles.

Sentiment has been dented in recent weeks by fears that the American economy, the world’s largest, is running out of steam. In a revised look at economic growth, the Commerce Department reported Thursday that the economy grew at a tepid annual rate of 1.8 percent in the first quarter, lower than many economists expected. Gasoline prices that reached $4 a gallon and sharp cutbacks in government spending hindered growth. The Labor Department also said more people applied for unemployment benefits last week.

Traders have also been shaken by worries that Greece may not get its next rescue loan installment, with a top European Union official reportedly warning that the International Monetary Fund may hold back on its part of the bailout. Those jitters hurt the euro and stocks on Thursday.

Then on Friday, Greece’s main opposition conservative party rejected a government plea for cross-party agreement on new austerity measures, despite strong pressure from the European Union and investor worries about a default. The party’s leader, Antonis Samaras, said he could not endorse a program that would “flatten the Greek economy and destroy Greek society.”

Mr. Samaras and other opposition party leaders met with Greece’s prime minister, George Papandreou, for more than three hours in a failed effort to reach a deal that would extend debt reduction measures to 2015, two years beyond the present government’s mandate.

Amid the uncertainty, the main stock index in Athens closed down 1.7 percent on the day.

The euro recovered strongly from a sell-off on Thursday, rising to $1.4263 from $1.4140 the day before.

European shares posted solid gains. Britain’s FTSE 100 was 1.1 percent higher; Germany’s DAX rose 0.7 percent and France’s CAC 40 was 1 percent higher.

Commodities stocks led the gains, with Rio Tinto and Antofagasta up 1.8 percent and 2.4 percent.

In Asia, most indexes rose, though Japan’s Nikkei 225 index drifted down to close 0.4 percent lower at 9,521.94.

Sony fell 3.2 percent, a day after reporting a 259.6 billion yen ($3.2 billion) loss for the fiscal year ended March 2011 and its third straight year of losses. Costs of online security breaches around the world and the March 11 earthquake in northeastern Japan battered the electronics and entertainment giant.

Hong Kong’s Hang Seng gained 1 percent to 23,118.07. South Korea’s Kospi finished 0.4 percent higher at 2,100.24. Australia’s S. P./ASX 200 added 0.5 percent to 4,684.

Mainland Chinese shares sank to their lowest level in nearly eight months as investors, succumbing to gloom over the outlook for the latter half of the year, unloaded shares.

The benchmark Shanghai Composite Index lost 1 percent to 2,709.95, its lowest close since Sept. 30. The Shenzhen Composite Index fell 2 percent to 1,101.11. Shares in coal companies advanced while agricultural-related and textile shares fell sharply.

Benchmark oil for July delivery was up 25 cents to $100.48 per barrel on the New York Mercantile Exchange.

The dollar fell to 81.09 yen from 81.30 yen.

Article source: http://feeds.nytimes.com/click.phdo?i=634bbb0ab16d754e00e42dad817f8270