11/23/11, "Jobless Claims Rise, Spending Barely Up," Reuters, US News
"As jobless claims rise, economists lower expectations for growth this quarter."
"The number of Americans filing new unemployment claims rose last week and consumer spending barely increased in October, according to data on Wednesday which could prompt economists
- to tamp down on expectations for solid growth in the current quarter.
"We are getting a disappointing start to the fourth quarter. It doesn't have the strong upward thrust we normally see in a regular recovery," said Pierre Ellis, senior global economist at Decision Economics in New York...
Initial claims for state unemployment benefits rose 2,000 to a seasonally adjusted 393,000 last week, the Labor Department said. Economists had forecast claims rising to 390,000.
Separately, the Commerce Department said consumer spending edged up 0.1 percent, slowing sharply from a revised 0.7 percent increase in September as households took advantage of the largest increase in income in seven months to rebuild their savings.
Economists had expected spending, which accounts for about 70 percent of U.S. economic activity, to rise 0.4 percent.
When adjusted for inflation, spending nudged up 0.1 percent last month, pointing to a loss of momentum after a relatively strong third quarter, when it grew at an annual rate of 2.3 percent.
Income rose 0.4 percent last month, the largest gain since March. That was a touch above economists' expectations for a 0.3 percent increase and followed a 0.1 percent gain in September.Taking inflation into account, disposable income rose 0.3 percent, the largest increase since October 2010. It had declined 0.1 percent in September.
With incomes failing to keep up with inflation amid a 9 percent unemployment rate, households had been saving less in recent months to fund spending. The saving rate increased to 3.5 percent last month from 3.3 percent in September.
Savings rose to annual rate of $400.2 billion from $376.9 billion in September.
In another report, the Commerce Department said durable goods orders excluding transportation rose 0.7 percent after a downwardly revised 0.6 percent increase in September.
Economists had forecast this category unchanged from the previously reported 1.8 percent rise.
But weak demand for transportation equipment saw overall orders falling 0.7 percent after declining 1.5 percent in September. Economists had forecast overall orders dropping 1.0 percent last month.
Overall orders were dragged down by a 4.8 percent drop in bookings for transportation equipment as orders for civilian aircraft dropped 16.4 percent last month. Boeing received only 7 orders for aircraft, according to the plane maker's website, down from 59 in September.
That overshadowed a 6.2 percent increase in orders for motor vehicles.
Despite the rise in orders excluding transportation, the tenor of the report was weakened by a drop in non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending.
- The category fell 1.8 percent last month
after a downwardly revised 0.9 percent rise in September.
It was the largest decline since January, when it fell 4.8 percent. Economists had
- expected a drop of 0.6 percent
from the previously reported 2.9 percent jump....
Shipments of non-defense capital goods orders excluding aircraft, which go into the calculation of gross domestic product, fell 1.1 percent after declining 1.0 percent in September."