Finance Matters

Posts Tagged ‘Commerce Department’

Official figures have revealed consumer spending in the US improved last month.

According to the Commerce Department, consumer spending rose 0.6% to $68.7 billion (£42.7 billion) in September and follows a 0.2% rise in August.

The figures will be a welcome boost for the economy which looked set to be heading towards a double dip recession just a few weeks ago.

Consumer spending is closely monitored as it accounts for more than two-thirds of economic output.

However, personal incomes rose just 0.1% in the month after a 0.1% gain in August, the Commerce Department said.

Income growth is being limited by stubbornly high unemployment, with a jobless rate that has been above the 9% mark for five consecutive months.

The figures come just a few days after the Commerce Department revealed the world’s largest economy expanded at its fastest pace in a year in the three months to the end of September.

The US economy grew at an annualised rate of 2.5% in the third quarter of this year, which was in line with forecasts but was a considerable improvement on the 1.3% growth reported for the second quarter.

However, despite both sets of encouraging figures, it appears that consumers are still wary about the future direction of the economy.

Last week, the Conference Board revealed US consumer confidence slumped in October.

The closely-monitored Consumer Confidence Index from the Conference Board dived to 39.8 this month from September’s reading of 46.4.

Not only was the reading less than forecasts of a level of 46.0, it was the lowest since March 2009, when the US was in recession.

The economic recovery in the US has so far been sluggish in the face of rising unemployment and a depressed housing market.

The world’s largest economy expanded at its fastest pace in a year in the three months to the end of September, official figures revealed today.

According to the Commerce Department, the US economy grew at an annualised rate of 2.5% in the third quarter of this year.

The figure was in line with forecasts but was a considerable improvement on the 1.3% growth reported for the second quarter.

Today’s figures will be a welcome boost for the economy which looked set to be heading towards a double dip recession just a few weeks ago.

The strong performance was due to a rise in consumer and business investment spending, as well as international trade.

Consumer spending was the strongest since the fourth quarter of last year, while business spending was the fastest in over a year.

Consumer spending is closely monitored as it accounts for more than two-thirds of economic output.

However, despite today’s encouraging figures, it appears that consumers are still wary about the future direction of the economy.

Earlier this week, the Conference Board revealed US consumer confidence slumped in October.

The closely-monitored Consumer Confidence Index from the Conference Board dived to 39.8 this month from September’s reading of 46.4.

Not only was the reading less than forecasts of a level of 46.0, it was the lowest since March 2009, when the US was in recession.

The economic recovery in the US has so far been sluggish in the face of higher unemployment and a depressed housing market.

Today, however, a separate report from the Labor Department revealed new claims for state unemployment benefits declined by 2,000 last week to a seasonally adjusted 402,000 – suggesting a steady improvement in the labour market.

In addition, yesterday a report suggested house prices were stabilising.

The Commerce Department has revealed the world’s largest economy grew by 1.3% on an annual basis in the April to June period – higher than an initial estimate of 1%.

The figure was also slightly higher than analysts’ expectations of 1.2% and follows a 0.4% growth rate in the first quarter of the year.

The upward revision was attributed to higher exports and strong spending and is the final figure for the second quarter.

For the first six months of the year, the economy expanded by 0.9% – this represented the lowest rate of growth in over two years.

Third quarter growth figures will be available next month and analysts are predicting an annualised growth rate of around 2%.

The US economy is struggling on the back of high unemployment and a depressed housing market.

Earlier this week, Federal Reserve Chairman, Ben Bernanke, warned that the US economy is facing a national crisis due to its high unemployment rate, which currently stands at 9.1%.

Earlier this month, the US Labor Department revealed the economy added no new jobs last month, which was a surprise after markets had expected 70,000 new jobs.

This represented the first time since 1945 that there has been a zero payrolls figure after 17,000 jobs were added in the private sector last month but these were cancelled out by 17,000 jobs lost in the public sector.

Mr Bernanke is urging the Government to assist the long-term unemployment and suggested that Congress should take more action to address the issue.

Earlier this month, President Barack Obama addressed the nation about a plan for job creation. He unveiled a $450 billion (£282 billion) package aimed at boosting the economy and reducing the federal deficit.

The bill includes tax cuts to workers and small businesses to boost job creation.

Mr Obama has previously said job creation is a top priority; continued high unemployment could threaten his prospects for re-election next year.

In the meantime, Mr Bernanke urged policymakers to introduce “housing policies” to boost the property market, which is currently struggling and many have suggested it is holding back the recovery.

Demand for housing in the US remains weak, despite mortgage rates hovering at record lows and falling house prices – the latter due to millions of home repossessions.

The US economy grew at an annualised rate of 1.3% between April and June, says the Commerce Department.

US consumer confidence remained weak in September, the Conference Board has reported.

The closely-monitored Consumer Confidence Index from the Conference Board edged higher to 45.4 this month from August’s upwardly revised reading of 45.2.

However, not only was the reading less than forecasts of a level of 46.6, it was the lowest since April 2009 when the economy was in the midst of a recession.

Furthermore, the index remains far away from the 90 points required to show that the world’s largest economy is on solid footing.

Since the index commenced in 1967, the average reading has been 95.6.

Commenting on the figures, Lynn Franco, director of the Conference Board Consumer Research Centre said: “The pessimism that shrouded consumers last month has spilled over into September. Consumer expectations, which had plummeted in August, posted a marginal gain.

“However, consumers expressed greater concern about their expected earnings, a sign that does not bode well for spending. In addition, consumers’ assessment of current conditions declined for the fifth consecutive month, a sign that the economic environment remains weak.”

This will be a cause for concern since consumer spending is closely monitored as it accounts for more than two-thirds of economic output.

Earlier this month, the Commerce Department revealed retail sales stagnated last month.

Sales were flat from the month earlier after July’s figure was revised down to 0.3% from 0.5%.

However, not only is consumer spending a concern, the economic recovery in the US remains sluggish in the face of higher unemployment and a depressed housing market.

The Labor Department recently revealed the US economy added no new jobs last month, which was a surprise after markets had expected 70,000 new jobs.

This represented the first time since 1945 that there has been a zero payrolls figure after 17,000 jobs were added in the private sector last month but these were cancelled out by 17,000 jobs lost in the public sector.

Meanwhile, in other US news this week, it has been revealed that house prices rose 0.9% in July compared with June when values rose 1.2%.

On an annual basis, however, prices are 4.1% lower.

The US housing market has remained in the doldrums for some time now and many have suggested it is holding back the recovery of the world’s largest economy but the latest figures suggest the housing market may be stabilising.

However, demand for housing in the US remains weak, despite mortgage rates hovering at record lows and falling house prices – the latter due to millions of home repossessions.