Economic Update: A Bout Of “Better Than Expected”

Sovereign debt problems in Europe and the U.S. have been the double feature investors were forced to watch in recent days. But last Friday’s upbeat jobs report gave the audience a break from the bad news. Hopefully, it’s not just a short intermission. Economic data for last week include:

  • U.S. construction spending rebounded 1.4% month-over-month in August, offsetting the revised 1.4% drop in July which was previously a 1.3% decline.
  • The Bureau of Labor Statistics’ (BLS) jobs report showed an upbeat 103,000 jobs gained in September. Revisions for the prior two months added an additional 98,000 jobs.
  • The ADP employment survey reported a rise of 91,000 private payrolls in September after showing an 89,000 private payrolls gain in August.
  • U.S. vehicle sales reportedly rose a seasonally adjusted 8% over August to 13.1 million annualized units in September, the highest total rate since April 2011.
  • International Council of Shopping Centers (ICSC) reported chain store sales, excluding Wal-Mart, also rose a healthy 5.5% over last September.
  • Wholesale trade sales rose 1.0% over July, while inventories jumped 0.4%, pushing the inventory-to-sales ratio down to 1.16 in August from 1.17 in July.
  • U.S. factory orders jumped 2.4% in July, after June numbers were revised to a 0.4% drop.
  • The ISM manufacturing index rose 1 point to 51.6 in September. The ISM nonmanufacturing index edged down 0.3 points to 53.0 for the same month. Both were better than market expectations.
  • U.S. factory orders dipped 0.2% month-over-month in August, as did manufacturers’ shipments. The inventories-to-shipments ratio inched up to 1.34 in August from 1.33 in July.
  • Initial jobless claims rose 6,000 to 401,000 in the week ended October 1. The prior week finally dipped below the 400,000 threshold level indicating a jobs recovery, only the second time since April. Continuing claims slid 52,000 to 3.7 million in the prior week.
  • Consumer credit fell by $9.5 billion in August, the first decline since September 2010.
  • Oil prices rose slightly to $83/barrel on Friday afternoon from the prior week’s $80/barrel.

For my full economic update click here.


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