It’s Friday and that means it’s time to review the latest economic data and identify which pockets of the economy are heating up and which are slowing down. Don’t worry about catching every headline and every report throughout the week—I recap all of the most important news impacting your wealth right here every Friday. Let’s take a look at this week’s big headlines:
On Monday, the Commerce Department revealed that consumer spending jumped 0.5% in September, while August’s figure was revised lower to show a 0.1% decline. Economists were expecting consumer spending to rise 0.4% in September. Personal income increased 0.3% in September, following a 0.2% jump in August. Wages and salaries climbed 0.3% in September. Given that consumer spending accounts for about 70% of U.S. GDP growth, the rebound in September was a welcome development.
Initial Claims for Unemployment
For the week ending October 29, initial claims for unemployment jumped by 7,000 to a seasonally adjusted 265,000. Economists were expecting jobless claims to remain unchanged at 258,000. The four-week moving average also climbed higher, rising to 257,750. Still, jobless claims have remained below the 300,000 threshold for 87-straight weeks.
The Labor Department reported yesterday that U.S. productivity increased at a 3.1% annual rate in the third quarter, which broke three-straight quarters of declines. Economists were looking for productivity to rise 2% in the third quarter. Total hours worked, though, only increased 0.3%.
Factory Goods Orders
The Commerce Department announced the factory goods orders increased for the third-straight month, climbing 0.3% in September. That topped economists’ estimates for a 0.2% rise. Factory goods orders for August were revised higher to show a 0.4% gain. U.S. manufacturing continues to be hindered by the strong U.S. dollar and poor global demand, but the increase in factory goods orders in September was encouraging.
Unemployment Rate Report
During October, 161,000 jobs were added and the unemployment rate slipped to 4.9%. Economists were expecting 173,000 jobs to be added last month. For September, the number of jobs added was revised higher to 191,000, up from 156,000. Average hourly wages increased 0.4% last month, topping estimates for 0.3% growth. Given the strong payroll report, especially the increase in wages, I would not be surprised if the Federal Reserve were to raise rates in December.
P.S. I will be speaking at the Seattle Marriott Bellevue in Bellevue, Washington on Wednesday, November 9. This seminar starts at 7 p.m. and you may attend at no cost, but please call 800-454-1395 to register. I will review where investors can achieve the highest yields in both bonds and stocks, as well my current market outlook, favorite stock picks and have an extensive question and answer session.