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Some promise for future in economic numbers

Applicants wait for the opening of a job fair held by National Career Fairs in Fort Lauderdale recently. Though applications for unemployment benefits have fallen, economic data released on Thursday suggest that the economy’s modest growth isn’t enough to bring a lot of hiring.

Associated Press

Applicants wait for the opening of a job fair held by National Career Fairs in Fort Lauderdale recently. Though applications for unemployment benefits have fallen, economic data released on Thursday suggest that the economy’s modest growth isn’t enough to bring a lot of hiring.

WASHINGTON — A spate of data Thursday painted a mixed picture of the U.S. economy: Demand for long-lasting manufactured goods fell and slightly fewer people signed contracts to buy homes. At the same time, the job market looked only a little better.

Taken together, the reports suggest the economy is growing only modestly, not quickly enough to spur much hiring.

"The economy overall has only weak forward momentum," Nigel Gault, chief U.S. economist at IHS Global Insight, said in a note to clients. "The news from housing may be improving, but manufacturing is struggling now."

Most of the data seemed discouraging on the surface. But a closer inspection of the details offered some promise.

• Companies cut orders for long-lasting goods by 13.2 percent in August, the Commerce Department said. That was the biggest drop in more than three years, but it was largely influenced by a 102 percent decline in volatile aircraft orders. Excluding transportation equipment, orders fell only 1.6 percent. And in a positive sign, orders in a category that reflect business investment plans rose 1.1 percent, the first increase since May.

• The overall economy grew at a 1.3 percent annual rate in 2012's second quarter, much lower than the 1.7 percent the government previously estimated. About half of the downward revision stemmed from the severe drought in the Midwest, which cut overall farm output. But growth also failed to reach estimates because exports and consumer spending expanded at a slower pace.

• The number of Americans who signed contracts to buy previously occupied homes fell in August from a two-year high in July. The National Association of Realtors said its index of sales agreements declined 2.6 percent to 99.2. That's just below the reading of 100 that is considered healthy. Still, the index is 10.7 percent higher than a year ago.

• Weekly applications for unemployment benefits plunged 26,000 to a seasonally adjusted 359,000, the lowest level in two months, the Labor Department said. The four-week average, a less volatile measure, fell to 374,000.

Applications are a measure of the pace of layoffs. When they consistently fall below 375,000, it typically indicates that hiring is strong enough to lower the unemployment rate.

Economists were mildly encouraged by the unemployment applications. But many still expect the government's employment report for September to show only modest job gains, perhaps about 100,000. That's about the same as in August.

The September jobs report will be released Oct. 5.

A survey of chief executives, released Wednesday, found a sharp drop in the number of large companies that plan to step up hiring or boost investment in the next six months. They cited worries over tax and budget policies in the United States and slower growth in Europe and China for the gloomier outlook.

Some recent indicators have been more optimistic. Consumer confidence jumped to a seven-month high in September, the Conference Board said Tuesday. Home prices are rising steadily nationwide.

And sales of new homes remained near a two-year high in August, the Commerce Department said Wednesday.

Some promise for future in economic numbers 09/27/12 [Last modified: Thursday, September 27, 2012 8:46pm]
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