Jobless claims rose last week; consumer spending weak in October

Rick Moran
Reuters is saying that these two indices may cause some analysts to pull back on their predictions of strong growth this 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.

Orders for durable goods were also weak, pointing to problems in the manufacturing sector. Some economists were predicting growth above 3% for this quarter. Given the same old bad news the economy is giving us, that doesn't look very realistic.

Reuters is saying that these two indices may cause some analysts to pull back on their predictions of strong growth this 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.

Orders for durable goods were also weak, pointing to problems in the manufacturing sector. Some economists were predicting growth above 3% for this quarter. Given the same old bad news the economy is giving us, that doesn't look very realistic.