Consumer spending rises strongly in September

WASHINGTON, Mon Oct 29, 2012 – Consumer spending rose solidly in September as households stepped up purchases on automobiles and a range of other goods, setting up a firmer base for consumption this quarter.

The Commerce Department said on Monday consumer spending increased 0.8 percent after a unrevised 0.5 percent gain in August.

Economists polled by Reuters had expected spending, which accounts for about 70 percent of U.S. economic activity to increase 0.6 percent in September.

Industrial output rises 0.4 percent in September

WASHINGTON, Tue Oct 16, 2012 – Industrial output rose by more than expected in September, posting a sharp rebound from a downwardly revised drop the previous month, which had been held back because of hurricane impact on oil and gas production in the Gulf of Mexico.

Industrial production rose by 0.4 percent, the Federal Reserve said on Tuesday. Analysts polled by Reuters had forecast a 0.2 percent rise compared to a 1.4 percent decline in August. This was initially reported as a 1.2 percent drop.

Industrial production encompasses output from factories, utilities and mining operations, including oil and natural gas production.

Manufacturing output rose by 0.2 percent, utilities output was up 1.5 percent and mining output advanced 0.9 percent in September.

Capacity utilization, a measure of how fully firms are using their resources, was at 78.3 percent in September, matching forecasts, and was slightly higher than the 78.0 percent rate in August. This was previously estimated at 78.2 percent.

Jobless rate tumbles to near four-year low

WASHINGTON, Fri Oct 5, 2012 – The U.S. unemployment rate dropped to a near four-year low of 7.8 percent in September, a potential boost to President Barack Obama’s re-election bid.

The Labor Department said on Friday the unemployment rate, a key focus in the race for the White House, dropped by 0.3 percentage point to its lowest point since January 2009 as employers added 114,000 workers to their payrolls.

The drop in the unemployment rate reflected an even bigger surge in new jobs captured by a survey of households and came even as Americans returned to the labor force to resume the hunt for work. The workforce had shrank in the prior two months.

Payrolls for July and August were revised to show 86,000 more jobs created than previous reported, mostly to reflect increases in government employment.

The jobless rate is now where it was when Obama took office in January 2009. Household employment increased 873,000, the most since June 1983, according to the household survey. The bulk of the gains were part-time jobs.

“There is something in these numbers for everyone. The rise in the participation rate shows somewhat of a real improvement in the labor market,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.

U.S. stock index futures rose on the report, while prices for Treasury debt tumbled. The dollar rose versus the yen and the euro.

Private sector adds 162,000 jobs in September: ADP

NEW YORK, Wed Oct 3, 2012 – Companies added 162,000 jobs in September, more than economists expected but still pointing to slow improvement in the labor market, data from a payrolls processor showed on Wednesday.

Economists surveyed by Reuters had forecast the ADP National Employment Report would show a gain of 143,000 jobs.

The increase in private payrolls in August was revised down to 189,000 from the previously reported 201,000. July’s rise was also revised down, to 156,000 from 173,000.

The report is jointly developed with Macroeconomic Advisers LLC.

“This is consistent with a moderate pace of job growth and we still haven’t made much headway with the losses during the downturn,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

“We would like to see growth on the order of 200,000 to 250,000.”

U.S. stock index futures added to gains immediately after the data, while the dollar edged higher against the yen.

The ADP figures come ahead of the government’s much more comprehensive labor market report for September due on Friday, which includes both public and private sector employment.

That report is expected to show job growth improved slightly, with employers adding 113,000 jobs. Private payrolls are seen rising by 130,000.

Economists often refer to the ADP report to fine-tune their expectations for the payrolls numbers, though it is not always accurate in predicting the outcome.

Consumer confidence at seven-month high in September

NEW YORK, Tue Sep 25, 2012 – Consumer confidence jumped to its highest level in seven months in September as Americans were more optimistic about the job market and income prospects, a private sector report showed on Tuesday.

The Conference Board, an industry group, said its index of consumer attitudes rose to 70.3 from an upwardly revised 61.3 in August. It was the highest level since February and topped economists’ expectations for 63, according to a Reuters poll.

August was originally reported as 60.6.

“Despite continuing economic uncertainty, consumers are slightly more optimistic than they have been in several months,” said Lynn Franco, director of The Conference Board Consumer Research Center, said in a statement.

The expectations index climbed to 83.7 from 71.1, while the present situation index gained to 50.2 from 46.5.

Consumers’ labor market assessment improved. The “jobs hard to get” index slipped to 39.9 percent from 40.6 percent the month before, while the “jobs plentiful” index rose to 8.3 percent from 7.2 percent.

Looking six months ahead, 16.3 percent expected income increases, up from 16 percent, while 14.1 percent anticipated decreases, down from 16.7 percent.

Consumers also felt better about price increases with expectations for inflation in the coming 12 months down to 5.8 percent from 6 percent.

PIMCO’s Gross spotlights crumbling credit in September outlook

NEW YORK, Wed Sep 5, 2012 – Bill Gross, founder and co-chief investment officer of bond giant PIMCO, said in his September investment outlook that low returns for banks and other lenders will lead to reduced lending and a scaling back of operations in coming years.

Gross, whose Pacific Investment Management Co had $1.82 trillion in assets as of June 30, wrote that weak returns for banks and the “overleveraged” condition of borrowers has brought the global economy to a tipping point.

For some time now, Gross has been sounding a somber note about the economy and prospects for economic growth. In his last investor letter, he talked about the death of equities and the prospect for mediocre returns for both bonds and stocks.

“When credit is priced such that carry is no longer as profitable at a customary amount of leverage/risk, then the system will stall, list, or perhaps even tip over,” Gross wrote.

Gross wrote that credit “is what makes the global economy go” and that financial institutions such as banks, insurance companies, and investment firms will lose their incentive to lend at low rates and cut back on lending and enact more austere measures.

“In the process, (financial institutions) lay off, instead of hire new workers; close branch offices or even ATM machines by the thousands as did Bank of America recently; and yes, ultimately reduce the rate of lending or credit growth which propelled the global economy so effortlessly over the past century,” Gross wrote.

The U.S. Federal Reserve and other central banks may be “to blame” for the “current shipwreck,” wrote Gross, and their plans to inject liquidity into the financial system have backfired.

Gross, who runs the world’s largest bond fund, the PIMCO Total Return Fund, which has $272.5 billion in assets as of Aug. 31 and attracted about $1.29 billion in inflows last month, according to Morningstar.

Gross wrote that reduced lending habits and a new “age of inflation” will lead to weaker returns on both stocks and bonds, which was the main point in his August letter.

September back-to-school sales top expectations at some retailers

NEW YORK ― Early reports show U.S. retailers largely did a brisk back-to-school business in September, although one chain catering to young women was left to question its strategy as its sales bucked the trend and fell.

Overall, U.S. retailers that report monthly sales are expected to post an average sales gain of 4.6 percent at stores open at least a year, or same-store sales, according to Thomson Reuters. Most of the chains that issue the reports will do so on Thursday morning.

September is a particularly important time for retailers focused on children’s and young adult apparel. Back-to-school shopping is the second-largest retail spending season behind the holiday period of November and December.

Hurricane Irene, which battered the U.S. East Coast at the end of August, may have shifted some spending in September to home improvement chains.

Holiday season forecasts have been tepid so far as the economy takes its toll on consumer sentiment. The National Retail Federation said on Thursday that it expects sales in November and December to rise 2.8 percent, down from a 5.2 percent rise in 2010.

Chains such as Limited Brands Inc., Buckle and Zumiez Inc. posted much better-than-expected jumps in September sales.

At Wet Seal Inc., which sells young women’s clothing at its Wet Seal and Arden B chains, momentum was good through Labor Day weekend. Then things became challenging following the back-to-school peak, Chief Executive Susan McGalla said in a statement.

Wet Seal’s same-store sales slid 0.3 percent, below the rise of 3.8 percent analysts were expecting. Wet Seal said it expects quarterly sales to fall slightly short of its earlier forecast and its earnings could miss Wall Street’s view.

Retailers are doing what they can to appeal to shoppers such as Joanna Polowitz, who said that she lost her job a month ago and thinks the economy is getting worse.

“I’m definitely holding back, only buying necessities, socks for my son, food because it’s reasonable here,” Polowitz said as she shopped at a Walmart in North Bergen, N.J., on Wednesday. “We’re buckling down, not going to dinner as much.”

Same-store sales at Cato Corp., a value-priced apparel chain, fell 3 percent.

Retailers including Home Depot Inc., Lowe’s Cos. Inc. and Sears Holdings Corp., which sell generators and other storm-related items, do not report monthly sales.

Same-store sales rose 4.4 percent in September, according to data released by the Johnson Redbook Retail Sales Index on Tuesday. That index measures a sample of large general merchandise retailers.