The Commerce Department reported Wednesday that consumer expenditures rose by a nominal .1% in October, which is down slightly from a .7% increase in consumer spending that we saw in September. Meanwhile, U.S. incomes rose a bit, up .4% in October compared to a .1% increase in September. However, despite these lack luster figures, there is room for optimism in the retail market, which is predicting an increase in spending of 2.8% compared to the 2010 holiday shopping season.
This week’s jobless claims rose by 2,000, to a seasonably adjusted 393,000. The increase by 2,000 was the trend breaker of three previous consecutive weeks of jobless claims decline. However, the Labor Department is not alarmed by this shift and does not find it unusual. The four-week moving average of new jobless claims, which is a more reliable indictor because it handles the issue of unusually volatile weeks, actually is decreasing by 3,250. Economists generally contend that jobless claims must stay below 400,000 in order to see any real market recovery. Although, jobless figures are hovering only slightly below that mark, it is still positive to note that those figures are slightly below rather than slightly above the 400,000 mark.
Reports also have shown a decrease in purchases of durable goods. Durable goods are products that are designed not to wear out quickly and are to be used over time, rather than consumed immediately. Notable durable goods are products such as cars, jewelry, phones, refrigerators, and furniture. Nondurable goods are products such as food, fuel, shoes, and paper. The figure for durable goods is down .7%. However, this estimate slightly is misleading because a substantial portion of the .7% decrease can be attributed to a large decline in purchases of commercial airplanes, which is down 16.4%. Several other durable good sectors actually have reported gains, such as a 6.2% rise in orders for motor vehicles and parts.
Eric Morath and Tom Barkley, Spending Slowed in October, https://online.wsj.com/article/SB10001424052970204630904577055931450123646.html (accessed 11/23/2011)