WASHINGTON (9/30/13)--Purchases by U.S. consumers increased in August--despite government cutbacks--for a fourth consecutive month. Rising incomes lifted consumer spending, which comprises the largest part of the economy (Bloomberg.com, The Wall Street Journal and The New York Times Sept. 27).
Household spending--or personal purchases--climbed 0.3%, after a 0.2% gain in July, the Commerce Department said Friday.
Stock market advances, escalating home values and a better job market are mitigating the effects of this year's payroll tax hikes, providing households the ability to maintain purchases, Bloomberg said. However, spending has shown scant momentum since the second quarter ended, Bloomberg added.
Although there were stronger wage advances and respectable growth in personal income last quarter, those figures indicate the holiday shopping season will be--at best--adequate, said Gus Faucher, a senior economist at PNC Financial Services Group Inc. in Pittsburgh.
WASHINGTON (9/30/13)--Initial U.S. claims for unemployment benefits fell for the week ended Sept. 21 to the lowest level in nearly six years, indicating progress in the labor market, after recent data irregularities from two states in reporting claims (The Wall Street Journal, Bloomberg.com, The New York Times and Moody's Economy.com Sept. 26).
Initial claims--a proxy for layoffs--declined 5,000 for the week, to a seasonally adjusted 305,000, the Labor Department said Thursday.
Fewer job cuts could indicate employers are more positive about the outlook for consumer demand, Bloomberg said.
Larger gains in consumer spending--which constitutes 70% of the U.S. economy--will require more income growth and further employment advances, Bloomberg added.
The drop-off in claims suggests ongoing improvement in the labor market and indicates that employers are slightly more optimistic about the outlook for the economy, Gennadiy Goldberg, a strategist at TID Securities USA LLC in New York, told Bloomberg.
Meanwhile, continuing claims for unemployment benefits increased 35,000--to 2.82 million--for the week ended Sept. 14--the first rise in a month.