Category Archives: U.S. Economic News

[08/01/13]  The number of Americans filing new claims for unemployment benefits fell unexpectedly last week, touching a 5-1/2 year low, suggesting a steadily improving labor market. Initial claims for state unemployment benefits dropped 19,000 to a seasonally adjusted 326,000, the lowest level since January 2008, the Labor Department said on Thursday. Economists polled by Reuters had expected first-time applications to rise to 345,000 last week. While claims are extremely volatile in July because of summer auto plant shutdowns, the general tone of the report remained consistent with a pick-up in job gains. The four-week moving average for new claims, which irons out week-to-week volatility, fell 4,500 to 341,250. "This suggests the...

[07/31/13]  The Federal Reserve issued a 700-word statement on Wednesday, but four words would have sufficed: see you in September. As expected, the Fed’s policy-making committee voted to press ahead for now with its campaign to increase job creation. And its statement said nothing about how much longer it would continue to add $85 billion a month to its holdings of mortgage-backed securities and Treasury securities. But the Fed left its economic outlook basically unchanged, suggesting that the central bank still intended to reduce the volume of its purchases later this year. The statement, issued after a regular two-day meeting of the Federal Open Market Committee, acknowledged the...

[07/26/13]  Americans are more confident about the economy than at any time since July 2007, a survey found, suggesting consumers will spend more and accelerate growth in the months ahead. The University of Michigan said on Friday that its final reading of consumer sentiment in July was 85.1. That’s up one point from June and nearly 13 points higher than a year ago. Rising home prices and steady job gains are bolstering household wealth and income. The proportion of Americans who expect their inflation-adjusted incomes to rise in the coming year is greater than at any time since late 2007, the survey found. And the percentage of Americans who say...

[06/10/13]  Rating agency Standard and Poor's has raised its credit outlook for the US economy from negative to stable.

In August 2011, S&P downgraded the US rating one notch from AAA to AA+, but now believes further downgrades are less likely as the economy continues to recover. The news saw the US dollar strengthen 1.3% against the Japanese yen, and 0.2% against the euro. But S&P is still concerned about the high levels of US debt. The US Treasury Department, which had said that S&P's calculations in making its initial downgrade were flawed, welcomed the latest action. "We're pleased that they are recognising the progress in the US economy and...

[06/04/13]  Americans' demand for foreign goods such as cars and cellphones pushed imports higher and widened the U.S. trade deficit in April, while slower overseas growth restrained U.S. exports. Americans’ appetite for foreign goods, including cars and cellphones, pushed imports higher and widened the U.S. trade deficit in April, while slower growth abroad restrained overseas demand for U.S. products. Imports rose 2.4% from March, to $227.7 billion, and exports increased just 1.2%, to $187.4 billion, the Commerce Department said Tuesday. As a result, the nation’s trade gap expanded by 8.5% from March to $40.3 billion. The report bolstered evidence that U.S. consumers are powering the nation’s economic growth despite...

[06/03/13]  Manufacturing (NAPMPMI) in the U.S. unexpectedly shrank in May at the fastest pace in four years, showing slowdowns in business and government spending are holding back the world’s largest economy. The Institute for Supply Management’s factory index fell to 49, the lowest reading since June 2009, from the prior month’s 50.7, the Tempe, Arizona-based group’s report showed today. Fifty is the dividing line between growth and contraction. The median forecast of 81 economists surveyed by Bloomberg was 51. Across-the-board federal budget cuts and overseas markets that are struggling to rebound will probably continue to curb manufacturing, which accounts for about 12 percent of the economy. At the same time, demand for automobiles, gains...

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[05/31/13]  Americans cut back on spending in April after their income failed to grow, a sign that economic growth may be slowing. Consumer spending dropped a seasonally adjusted 0.2 percent in April, the Commerce Department said Friday. That was the first decline since last May. It followed a 0.1 percent increase in March and a 0.8 percent jump in February. A drop in gas prices likely lowered overall spending. Adjusted for inflation, spending ticked up 0.1 percent last month. Still, that was the smallest gain since October. Consumers also likely spent less to heat their homes last month, which may have reduced spending on utilities. April's weather was mild after an...

[05/29/13]  Is a housing recovery finally at hand, or are we just witnessing a new bubble fueled by unlimited government finance? Or is it neither of the above? Average prices for new homes reached a new all-time high of $330,800 in April, a 15.4 percent increase in a single month, and 34.9 percent off its January 2009 low of $245,000. But before you run off to start flipping houses on borrowed money, do not miss the giant grain of salt. The broader Case-Shiller Home Price Index, which includes prices for new and existing homes, has seen only a 10.8 percent increase through March since hitting its low in January...

[05/23/13]  Economic data released on Thursday indicated solid job growth and provided further signs that housing is recovering. The number of Americans applying for unemployment benefits fell 23,000 last week to a seasonally adjusted 340,000, a level consistent with firm job growth. And sales of new homes rose in April to the second-highest level since summer 2008, while the median price for a new home hit a high. The Labor Department said on Thursday that the less volatile four-week average of jobless claims declined just 500 to 339,500. That is close to the five-year low of 338,000 reached in the first week of May. The four-week average is 9...