More Americans than forecast filed for unemployment benefits last week. Applications for jobless insurance increased 2,000 in the week ended Nov. 19 to 393,000, Labor Department figures showed. Economists forecast 390,000 claims according to the median estimate in a Bloomberg News survey. Orders for durable goods fell 0.7 percent in October after a 1.5 percent revised drop the prior month, and consumer spending rose 0.1 percent for the month, the Commerce Department added.
Orders for U.S. Durable Goods Fall
Orders for durable goods fell in October as demand for aircraft and business equipment cooled, indicating a slowing global economy may temper purchases of U.S. manufactured goods.
Bookings for equipment meant to last at least three years declined 0.7 percent, less than forecast, after a 1.5 percent drop the prior month that was more than twice as large as originally reported, data from the Commerce Department showed today in Washington. Excluding defense and aircraft, demand for computers and other business equipment decreased by the most since January.
The risk the global economy is losing steam as Europe deals with its debt crisis may lead overseas companies, which have supported U.S. factories, to scale back. Even so, a government tax break targeted at stimulating business investment may sustain capital investment while a weaker dollar keeps American- made goods attractive to foreign buyers.
“Businesses are investing but they are still trying to stay cautious,” Omair Sharif, an economist at RBS Securities Inc. in Stamford, Connecticut, said before the report. “If things should start to turn down, they wouldn’t want to be caught with too many goods.”
Stock-index futures held earlier losses after the reports as the cost of insuring European government debt against default rose to a record on concern the region’s crisis is worsening. The contract on the Standard & Poor’s 500 Index maturing next month fell 0.7 percent to 1,174.5 at 8:36 a.m. in New York. Treasury securities were little changed.
Consumer Spending in U.S. Rises 0.1%
Consumer spending in the U.S. rose less than forecast in October as Americans used the biggest gain in incomes in seven months to rebuild savings, indicating the biggest part of the economy may contribute less to the recovery.
Purchases increased 0.1 percent, after a 0.7 percent gain the prior month, Commerce Department figures showed today in Washington. The median estimate of 82 economists surveyed by Bloomberg News called for a 0.3 percent advance. Incomes rose 0.4 percent, and the savings rate climbed from a four-year low.
An October slowdown in household spending, which accounts for about 70 percent of the economy, raises concern about the holiday shopping season that kicks off this week. A jobless rate of 9 percent and confidence at recession levels explain why chains like Macy’s Inc. (M) and Kohl’s Corp. are offering discounts.
Durable Goods
Bookings for goods meant to last at least three years fell 0.7 percent after a 1.5 percent decrease the prior month that was larger than originally reported, the Commerce Department said today in Washington. Orders excluding transportation equipment rose, and demand for business equipment dropped.
Wages and salaries increased 0.5 percent, the biggest gain since March, today’s income and spending report showed.
The savings rate increased to 3.5 percent from 3.3 percent in September that was the lowest since December 2007.
Today’s report showed that adjusted for inflation, which are the figures used to calculate gross domestic product, consumer spending rose 0.1 percent after a 0.5 percent increase.
The Fed’s preferred price index, which is tied to spending patterns and excludes food and fuel, increased 1.7 percent from October 2010, compared with a 1.6 percent gain in the 12 months ended in September.
Greece Faces Last Opportunity to Remain in Euro Region, Central Bank Says
Greece Faces Last Chance to Stay in Euro, Central Bank Says Kostas Tsironis/Bloomberg
The Bank of Greece said in its interim monetary policy report that a 130 billion-euro bailout approved by European Union leaders on Oct. 26 “represents a milestone on the adjustment path of the Greek economy.”
The Bank of Greece said in its interim monetary policy report that a 130 billion-euro bailout approved by European Union leaders on Oct. 26 “represents a milestone on the adjustment path of the Greek economy.” Photographer: Kostas Tsironis/Bloomberg
Greece has one last chance to reshape its economy and stay in the euro region, the country’s central bank said, adding to European Union pressure on Greek political leaders to move decisively on economic revamping.
A 130 billion-euro ($174 billion) bailout approved by EU leaders on Oct. 26 “represents a milestone on the adjustment path of the Greek economy,” the Bank of Greece said today in its interim monetary policy report. Greece’s debt-sustainability dynamics have changed in the past year, putting the country in its most critical situation since World War II.
“We must step up the pace not just to reach our goals but to make up for lost ground,” Greek central bank Governor George Provopoulos said in Athens, according to an e-mailed transcript of his statements. “What is at stake is very great: it is Greece remaining a member of the euro and I think that for most Greeks there is no dilemma here. We must succeed.”
Provopoulos’s stark warning echoes that of new Prime Minister Lucas Papademos, a former vice president of the European Central Bank and former head of the Greek central bank, who has said Greece must remain a member of the euro area. Papademos was appointed this month after former Prime Minister George Papandreou’s bid to hold a referendum on the second financing package angered EU leaders, leading to a freeze on payments and throwing markets into disarray.
