Monthly Archives: September 2014

Consumer Spending Rises 0.5%, Personal Income up 0.3%

[09/30/14]  Americans boosted spending by a healthy amount in August, with about half of the increase coming from auto sales. Income rose by a modest amount. The Commerce Department says consumer spending rose 0.5% in August after showing no gain in July. It was the best result since spending also expanded 0.5% in June. Helped by strength in wages and salaries, income rose 0.3% in August, slightly faster than a 0.2% July increase. The spending gain was welcome evidence that the economy is maintaining strength in the current July-September quarter. Consumer spending accounts for about 70% of economic activity, and the slowdown in July had raised concerns about...
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Factory Construction Boosts Economy

[09/28/14]  After years of factory closings shrank the nation's industrial footprint, a mini-boom in plant construction is beginning to reverse the trend and fuel faster economic growth. A 12.6% surge in spending on non-residential structures — notably new and expanding factories — was a big reason for last week's upward revision of second quarter economic growth. The Commerce Department said the economy expanded at a 4.6% annual rate, up from its previous 4.2% estimate and the strongest growth in 2 ½ years. An auto sales boom, the housing recovery and the oil and natural gas drilling frenzy are all forcing manufacturers to build or enlarge plants to supply...
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Sales of New U.S. Homes Surged in August to Six-Year High

[09/24/14]  New-home sales in the U.S. surged in August to the highest level in more than six years, a sign that the housing recovery is making progress. Purchases of new houses jumped 18 percent to a 504,000 annualized pace, the strongest since May 2008 and surpassing the highest forecast in a Bloomberg survey of economists, Commerce Department figures showed today in Washington. The one-month increase was the biggest since January 1992. The housing market is improving in fits and starts this year amid slow wage growth and tight credit conditions. Sustained improvement in the job market will be needed to push up pay and sustain a stronger recovery. “Sales...
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Household Net Worth Has Rebounded Since Financial Crisis

[09/19/14]  The net worth of American households is now 20 percent higher than it was before it began to decline in 2007, the Federal Reserve reported this week. It said the households together were worth $81.5 trillion at the end of the second quarter, higher than ever and up 10 percent from a year earlier.

By another measure, household net worth is a little short of the record highs reached before the recession. It amounted to 471 percent of the nation’s gross domestic product in the second quarter, just short of the record 473 percent set in early 2007.

Those figures...

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As Bond-Buying Ends, Yellen Now Will Chart Course for Federal Reserve

[09/15/14]  For Janet L. Yellen, the Federal Reserve’s chairwoman, the easy part is over. The first phase of the Fed’s retreat from its economic stimulus campaign, plotted by her predecessor, is nearly complete. Now, as Ms. Yellen nears the end of her first year in office, it is her turn to chart the way forward.

Ms. Yellen and her colleagues on the Fed’s policy-making committee, who will convene here on Tuesday and Wednesday, are broadly agreed that the Fed’s ability to improve economic conditions is nearing the end of the line, and they are inclined to start raising short-term interest rates around...

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Fastest Services Growth Since 2005 Lifts U.S. Expansion

[09-04-14]  Service providers such as retailers and construction firms expanded in August at the fastest pace in nine years, pointing to greater momentum in the economy that’s generating jobs and brightening Americans’ spirits. The Institute for Supply Management’s non-manufacturing index climbed to 59.6, the highest since August 2005, from 58.7 a month earlier, the Tempe, Arizona-based group said today. Bloomberg’s weekly measure of consumer sentiment rose to the second-highest level in a year and filings for unemployment benefits were little changed, other figures showed. The improvement at service providers was broad-based and, combined with faster manufacturing growth, raises the odds of a self-supporting cycle of more spending and...
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Fed Reports Expansion as Economy Improves

[09-04-14]  The economy strengthened in all regions of the country in July and August, including in areas like consumer spending, auto sales and tourism, the Federal Reserve reported in a survey released on Wednesday.

A separate report from the Commerce Department showed that business orders for factory goods shot up by a record amount in July, reflecting a surge in demand in the volatile category of commercial aircraft. But outside of transportation, orders actually fell slightly during the month, although the setback was expected to be temporary.

The Fed said all 12 of its regions reported growth. Six — New York, Cleveland, Chicago,...

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Private Sector Jobs are Coming Back

[09-04-14]  It's been a good summer for jobs. Private employers added 204,000 new workers in August, payroll processing firm ADP said Thursday. That marks the fifth straight month of companies adding at least 200,000 new hires to their payrolls. To put it another way, over one million jobs have been added in the private sector since April. "Steady as she goes in the job market," said Mark Zandi, chief economist of Moody's Analytics. The especially encouraging news is that businesses of all sizes and across all industries are hiring. Jobs that pay middle wages, such as in government or manufacturing, are also on the rise now, Zandi said. Job gains...
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