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US consumer spending increased in October; Weekly jobless benefit claims fell last week; Durable goods orders dipped again
By Finfacts Team
Nov 25, 2009 - 3:08:47 PM
US consumer spending increased in October by 0.7% as incomes rose and inflation remained low. Personal income rose by 0.2% for the second straight month. In a separate report, initial claims for jobless benefits declined by 35,000 to 466,000 in the most recent week. However, durable goods, expected to last at least three years fell in October, and a barometer of capital spending by businesses, fell in another sign of the recovery's slow pace.
Consumer Spending
The Bureau of Economic Analysis reported today that personal income increased 0.2 percent in October after increasing a similar amount in September. Wages and salaries, the largest component of personal income, were flat in October after falling 0.1 percent in September.
Real disposable personal income, income adjusted for inflation and taxes, increased 0.2 percent in October. In September, the increase was 0.1 percent.
Real consumer spending, spending adjusted for price changes, increased 0.4 percent in October, after decreasing 0.7 percent in September. The increase in October reflected an upturn in purchases of new cars. The decline in September reflected the end of the federal “cash-for-clunkers” car rebate program, which boosted sales in July and August.
PCE (personal consumer expenditure) prices increased 0.3 percent in October. Excluding food and energy, prices rose 0.2 percent.
Personal saving rate
Personal saving as a percent of disposable income was 4.4 percent in October, compared with 4.6 percent in September.
Jobless Claims Drop
Te number of US workers filing new claims for jobless benefits last week fell to the lowest level since September of 2008. Total claims lasting more than one week, also dropped.
Initial claims for jobless benefits dropped by 35,000 to 466,000 in the week ended Nov. 21st, the Labor Department said today. The previous week's level was revised to 501,000 from 505,000. This represents the lowest figure for claims since September 13, 2008 and it is the first time initial claims have dropped below the 500,000 mark since early January, according to the Labor Department.
The four-week moving average of new claims, which aims to smooth volatility in the data, also dropped by 16,500 to 496,500 from the previous week's revised average of 513,000.
Continuing claims, extending more than one week in the week ended Nov. 14th, dropped by 190,000 to 5,423,000 from the preceding week's revised level of 5,613,000.
The CNBC news team parses today's jobless claims, durable goods and personal income/spending data:
Durable Goods
New orders for manufactured durable goods in October decreased $1.0 billion or 0.6 percent to $166.2 billion, the US Census Bureau announced today. This was the second monthly decrease in the last three months. This followed a 2.0 percent September increase. Excluding transportation, new orders decreased 1.3 percent. Excluding defense, new orders increased 0.4 percent.
Machinery, down following two consecutive monthly increases, had the largest decrease, $1.9 billion or 8.0 percent to $21.8 billion.
Shipments
Shipments of manufactured durable goods in October, down two of the last three months, decreased $0.3 billion or 0.2 percent to $173.8 billion. This followed a 1.6 percent September increase.
Transportation equipment, also down two of the last three months, had the largest decrease, $1.9 billion or 4.2 percent to $43.4 billion. This was led by defense aircraft and parts, which decreased $1.0 billion.
Unfilled Orders
Unfilled orders for manufactured durable goods in October, down thirteen consecutive months, decreased $3.0 billion or 0.4 percent to $730.4 billion. This was the longest streak of consecutive monthly decreases since the series was first published in 1992 and followed a 0.4 percent September decrease.
Transportation equipment, down twelve of the last thirteen months, had the largest decrease, $2.2 billion or 0.5 percent to $424.3 billion.
Inventories
Inventories of manufactured durable goods in October, down ten consecutive months, decreased $0.1 billion to $304.2 billion. This followed a 1.2 percent September decrease.
Fabricated metal products, down thirteen consecutive months, had the largest decrease, $0.2 billion or 0.7 percent to $36.7 billion.
Capital Goods
October capital goods -- items meant to last 10 years or longer -- orders decreased 2.0 percent.
Nondefense new orders for capital goods in October, increased $0.6 billion or 1.2 percent to $54.6 billion. Shipments decreased $0.9 billion or 1.6 percent to $56.0 billion. Unfilled orders decreased $1.4 billion or 0.3 percent to $418.2 billion. Inventories increased $0.3 billion or 0.2 percent to $132.3 billion.
Defense new orders for capital goods in October decreased $1.9 billion or 18.4 percent to $8.5 billion.
Shipments decreased $0.4 billion or 3.8 percent to $11.0 billion. Unfilled orders decreased $2.4 billion or 1.7 percent to $137.3 billion. Inventories increased $0.5 billion or 2.5 percent to $20.3 billion.
