U.S. Economy Is Showing Signs of Stirring

Americans’ personal income rose significantly in August and joblessness edged down last week, two indications that the economy, while not in great shape, is at least doing better than during the first half of the year.

Incomes jumped 1.3% in August to a seasonally adjusted annual rate of $5.43 trillion, following rare back-to-back declines during the two previous months, the Commerce Department said Thursday.

It was the largest rise in four months and a rebound from July, when incomes were depressed by crop and property damage from flooding in the Midwest and drought in the South.

Incomes had fallen 0.3% in July and 0.1% in June, the first consecutive monthly drops in 39 years.

Meanwhile, the Labor Department said the number of Americans filing first-time claims for jobless benefits fell by 11,000 last week to 329,000. Analysts said that level is consistent with modest job growth.

But the less volatile four-week moving average of jobless claims, which analysts prefer to track because it more accurately reflects the labor situation, rose slightly for the second straight week.

In California, there were 8,258 new applications for unemployment benefits.

Both reports were taken as positive signs that the economic growth rate during the second half of the year was improving from the moribund 1.4% annual rate during the first half.

“I think we’re on the verge of a breakout from the siesta we went into in the first half,” said economist Robert G. Dederick of Northern Trust Co. in Chicago. “The economy’s got some get-up, not a lot of go, but some.”

He and other analysts are looking for growth in the range of 2.5% to 3% during the second half--an improvement but still well below the pace of past recoveries.

“There’s no recession on the horizon, but growth certainly will continue to be disappointing,” said Norman Robertson, an economist at Carnegie-Mellon University in Pittsburgh.

Income gains--which largely track improvement in the job market--are crucial to the economy’s future. They’re the underpinnings of consumer spending, which represents two-thirds of the nation’s economic activity. In August, Americans’ personal consumption spending rose 0.4% to a seasonally adjusted $4.42 trillion annual rate. The increase, which was the same as July’s, marked the fifth consecutive rise.