Consumer confidence plummets

iVillage Member
Registered: 03-18-2000
Consumer confidence plummets
3
Wed, 09-01-2004 - 11:25am
Surprisingly large decline in August laid to job worries

http://www.boston.com/business/articles/2004/09/01/consumer_confidence_plummets/


Consumers' renewed worries about job prospects led to a bigger-than-expected drop in confidence in August and provided more evidence of the fragility of the economic expansion.


The consumer confidence index, which had been rising since April, dropped to 98.2 from a revised reading of 105.7 in July, according to a report yesterday from the Conference Board, a private research group.


The reading was well below the 103.5 analysts expected, and was the lowest since May, when it registered 93.1.


''The slowdown in job growth has curbed consumers' confidence," said Lynn Franco, the director of the board's Consumer Research Center.


Economists closely track consumer confidence because consumer spending accounts for two-thirds of all US economic activity.


The report of the surprisingly large decline in consumer confidence came a day after the Commerce Department said consumers spent more freely in July, raising hopes that June's economic pause would only be temporary.


The government disclosed at the same time, however, that personal incomes grew slower than analysts expected in July.


But some economists were not deeply concerned about the dip in confidence.


Mark Vitner, an economist at Wachovia Securities, sees the latest snapshot of consumer sentiment as only a ''bump in the road" and expects the index will rebound in September. (Me: I disagree given Sept. & Oct. are generally slow months plus the uncertainty of the Nov. Election. Not that what *I* think matters.) ;)


Investors shrugged off the confidence as the Dow Jones average rose 51.40 to close at 10,173.92. The Standard & Poor's 500 index gained 5.09 to 1,104.24, while the Nasdaq Composite index was up 1.61 at 1,838.10. 


Manufacturing growth slows in August.


http://www.usatoday.com/money/economy/production/2004-09-01-ism_x.htm


Growth in factory activity slowed in August as new orders shrank and manufactures were forced to pay higher prices for supplies, a report Wednesday showed.


The Institute for Supply Management said its index of national manufacturing activity fell to 59.0 in August from 62.0 in July.


But the August figure was still not far below January's two-decade high of 63.6, as growth continued for a 15th consecutive month.


Analysts polled by Reuters had forecast a median reading of 60.0. Any reading above 50 indicates growth.


The employment index dropped to 55.7 in August from 57.3 in July, while the prices paid component shot up to a three-month peak of 81.5 from 77.0, in line with the rise in oil futures prices to nearly $50 a barrel.


The ISM index is compiled from monthly responses of purchasing executives at more than 400 industrial companies, ranging from textiles and chemicals to paper and computers.


Another report showed that construction spending rose 0.4% in July, in line with expectations and notching a record high, as low mortgage interest rates and a lean supply of homes fueled residential building.


All construction spending rose to a seasonally adjusted annual rate of $997.23 billion from an upwardly revised $992.90 pace in June, the Commerce Department said. Public, private, and private residential construction climbed to record high levels in July.


Analysts polled by Reuters were expecting the 0.4% rise.


Private residential construction spending climbed 0.3% to a $537.50 billion pace in the month from $536.13 billion. All private construction rose 0.4% to a $758.29 billion rate, while public construction jumped 0.6% to $238.94 billion.


Private non-residential construction, a indicator of business confidence, rose 0.8% to a $220.79 billion rate, reversing two months of declines.


And about 40% of U.S. chief executives expect their companies to add jobs over the next six months, up from 38% in June, according to a survey by the nation's main association of CEOs.


But 48% expect hiring to remain flat, compared with 43% in June, and 12% see jobs declining, compared with 19% in June, according to the quarterly CEO Economic Outlook survey by the Business Roundtable.

cl-Libraone~

 


Photobucket&nbs

iVillage Member
Registered: 03-18-2000
Thu, 09-02-2004 - 9:58am



Jobless claims jump


Number of people filing for unemployment benefits up sharply above Wall Street forecasts.

http://money.cnn.com/2004/09/02/news/economy/jobless_claims/index.htm?cnn=yes


The number of people filing for jobless benefits jumped last week, the government reported Thursday, as the latest reading on the strength of the labor market came in far worse than Wall Street forecasts.


The Labor Department reported that 362,000 people filed for initial unemployment benefits in the week ended Aug. 28, up from the reading of 343,000 the previous week. Economists surveyed by Briefing.com forecast that 340,000 filed for benefits.


Friday morning the Labor Department will release its eagerly anticipated August employment report, and many economists and investors believe the figures will give some guidance as to whether the Federal Reserve will again move to raise interest rates when it meets Sept. 21.


The previous two months have produced weak growth in the number of jobs being created in the economy. The data for the August report was collected before last week, though.


A Labor Department analyst attributed much of last week's gain to people seeking benefits in the aftermath of Hurricane Charley, which slammed into south Florida last month.


The analyst said "a little less than half" of the 19,000 increase in claims was due to the storm. Some economists had suspected there could be a hike in claims, as residents finished digging out from the storm and many applied for unemployment aid. However, analysts don't expect Charley to have had much effect on the August employment report due out Friday morning.


The claims level was the highest since the week ended April 10, when it was also 362,000. The four-week moving average of jobless claims - which smoothes the volatility seen in the weekly data -- also rose last week, to 343,000 from 336,750 in the week ended Aug. 21.


cl-Libraone~



Edited 9/3/2004 10:42 pm ET ET by cl-libraone

 


Photobucket&nbs

iVillage Member
Registered: 03-18-2000
Thu, 09-02-2004 - 10:22am

Stocks Flat After Jump in Jobless Claims


http://finance.myway.com/ht/nw/bus/20040902/hlm_bus-n02409449.html





U.S. stocks opened flat on Thursday after disappointing data on U.S. jobless claims and second quarter productivity, coupled with sluggish August retail sales reports, showed signs of economic weakness.

The Dow Jones industrial average (DJI) was up 10.33 points, or 0.10 percent, at 10,178.79. The Standard & Poor's 500 Index (SPX) was up 0.92 points, or 0.08 percent, at 1,106.83. The technology-laced Nasdaq Composite Index (IXIC) was down 0.86 points, or 0.05 percent, at 1,849.55.

cl-Libraone~

 


Photobucket&nbs

iVillage Member
Registered: 03-23-2003
Thu, 09-02-2004 - 10:26am

Even if they attribute that 19,000 increase to Hurricane Charley, that still means that unemployment claims are holding steady and NOT decreasing.


The previous two months have produced weak growth in the number of jobs being created in the economy. The data for the August report was collected before last week, though.


So, August's data will reflect the data without the supposed impact of the storm...this will be interesting...