The markets and exchange traded funds (ETFs) went limp this morning after more signs emerged that the U.S. economic recovery would be a long and slow one.
The most disappointing reports came from the manufacturing industry and the jobless sector. Manufacturing activity dipped to 52.6, down from 52.9 in August. It was below analysts’ expectations, but it was the second consecutive month in which the reading came in above 50, indicating expansion, reports Tim Paradis for the Associated Press.
The Labor Department said jobless claims rose to 551,000, which was more than expected. The increase follows three weeks of declines. Economists expect that the unemployment rate will rise to 9.8%, up from 9.7% in August.
Construction spending rose 0.8% in August, thanks to higher outlays for homes, reports Rex Nutting for MarketWatch. But the increase really only offset a downward revision to July’s spending numbers, which declined 1.1%.
In better news, pending home sales rose to a two-and-a-half-year high, jumping 6.4% from July. The number beat forecasts, and the jump was the seventh straight increase, reports Alan Zibel for the Associated Press.
- iShares Dow Jones U.S. Home Construction (NYSEArca: ITB): up 26.1% year-to-date
Consumer spending has also jumped sharply in August thanks to things like the “cash for clunkers” program. The 1.3% jump was the largest in nearly eight years, but economists caution that this jump isn’t laying any foundation for an economic recovery. Automakers are already girding themselves for a drop in September sales, reports Jack Healy for The New York Times.
For more stories on consumer activity, visit our retail category.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.