U.S. economic numbers provide mixed signals
Last Updated: Wednesday, November 25, 2009 | 11:44 AM ET
CBC News
New U.S. economic numbers show a job market slowly improving but fewer sales of big-ticket manufactured items.
The number of Americans claiming unemployment benefits for the first time dipped below the 500,000 mark last week, hitting the lowest level in more than a year.
And the four-week moving average of new jobless claims, which smooths out week-to-week fluctuations, decreased by 16,500 from the previous week to 496,500, the Department of Labour reported Wednesday.
The numbers indicate fewer Americans see the need to file for unemployment benefits, a sign of a more optimistic employment market. However, weekly claims remain well above 400,000, the level economists generally peg as a sign that payrolls are expanding.
Also Wednesday, the U.S. Bureau of Economic Analysis said personal incomes and consumption rose in October, by 0.2 per cent and 0.7 per cent respectively versus September.
The monthly personal consumption gain represented a turnaround from September when individual Americans cut their spending by 0.6 per cent compared with a month earlier.
Durable goods sag
On the downside, orders for durable goods — machines and other long-lasting products — stumbled unexpectedly, slipping 0.6 per cent in October from the previous month. Analysts were predicting a rise of 0.5 per cent.
More troubling still, machinery orders posted the biggest drop of any sub-category, off eight per cent after gains in the previous two months. Businesses usually experience productivity gains from installing more modern equipment.
Mixed signals of slow recovery
The durable-goods stumble is a further indication that, while overall U.S. commercial conditions are improving, the trajectory of the economy likely resembles a mountain range — with downs as well as ups — rather than a rocket's flight.
U.S. gross domestic product grew at an annualized rate of 2.8 per cent in the July-September quarter, a figure that was revised downward from an initial estimate of 3.5 per cent.
"Although the pace of GDP growth in the quarter represents a marked improvement from declines of 0.7 per cent and 6.4 per cent in the second and first quarters, respectively, it is indicative of an only modest recovery in economic activity," Royal Bank economist Paul Ferley commented earlier this month.
