U.S. Data Showing Economic Vigor
The U.S. economy extended last quarter’s momentum into October and November, with reports Wednesday showing the biggest jump in durable goods orders in 15 months, the lowest weekly jobless claims in three years and higher consumer confidence.
“The statistical mosaic is coming together and suggesting a solid and presumably durable recovery -- finally,” said Alan Blinder, a Princeton University economist and former vice chairman of the Federal Reserve.
Orders for items made to last at least three years increased 3.3% in October to $184.5 billion, the Commerce Department said. The Labor Department said initial unemployment benefit claims in the week ended Saturday fell 11,000 to 351,000, the fewest since George W. Bush became president in January 2001.
Other reports showed personal incomes rose and new-home sales held close to a record for October.
Personal incomes rose 0.4% and spending was unchanged in October, the Commerce Department said.
The University of Michigan’s final consumer sentiment index for November rose to 93.7 from 89.6 in October.
New homes sold at an annual pace of 1.105 million last month, down 3.5% yet strong enough for the fifth-best rate on record, the Commerce Department said. Mortgage applications rose for a second straight week this week and a refinancing index gained 27.8%, the Mortgage Bankers Assn. said, showing that housing may continue aiding growth.
“Improvements appeared to be reasonably broadly based,” the Federal Reserve said Wednesday in its latest survey of economic conditions by its 12 regional banks. “Reports received from the district banks suggest that the economy continued to expand in October and early November,” said the survey, known as the “beige book” for the color of its cover.
In the Fed’s San Francisco district, businesses reported “solid growth in the economy in October and early November,” with consumer spending bolstered by “pre-holiday discounting and an early start to the winter ski season.” Banks reported increased deposits and increased demand for business loans.
The boost in durable goods orders followed a 2.1% rise in September. Excluding transportation equipment, orders rose 2.4%, the sixth straight increase and the longest such string since 1994. Improving orders and production suggest businesses are gaining confidence that demand will be sustained.
Machinery orders increased 1% last month after rising 1.5% in September. Communications equipment orders rose 25% and orders for computers and electronic products increased 4%.
Orders for transportation equipment increased 5.5% after a 0.1 rise in September. Bookings for motor vehicles fell 1.1% and aircraft orders surged 22% after falling 5.1% the previous month.
Jobless claims last week were the lowest since the week ended Jan. 20, 2001, when they totaled 339,000.
The economy has created 286,000 jobs since August, the Labor Department previously reported, and payroll gains may cause consumer spending to accelerate next year, said Lynn Reaser, chief economist of Banc of America Capital Management in St. Louis.
