Tag Archives: Economic Indicators

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Consumer Confidence Slips as Outlook Dims

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By Reuters

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Reed Saxon/AP

By Leah Schnurr

NEW YORK — U.S. consumer confidence pulled back in July as consumers were less optimistic about the outlook for the economy and labor market, according to a private sector report released Tuesday.

The Conference Board said its index of consumer attitudes slipped to 80.3 from an upwardly revised 82.1 in June.

The industry group’s report was shy of economist expectations for the index to hold steady at June’s original reading of 81.4.

The expectations index dropped to 84.7 from 91.1. Still, consumers weren’t so gloomy about their current standings, with the present situation index rising to 73.6 from 68.7, the highest level since May 2008.

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Pending Sales of U.S. Homes Slip From 6-Year High

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By The Associated Press

Pending sales of U.S. homes fall from 6-year high

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Gene J. Puskar/APIn this Tuesday, July 23, 2013, photo, a home is for sale in Mt. Lebanon, Pa.

By CHRISTOPHER S. RUGABER

WASHINGTON – The number of Americans who signed contracts to buy homes dipped in June from a six-year high in May, a sign that completed sales could stabilize in the next month or two.

The National Association of Realtors says its seasonally adjusted index for pending home sales ticked down 0.4 percent to 110.9 in June. The May reading was revised lower by a percentage point to 111.3, but it was still the highest since December 2006.

The slight decline suggests higher mortgage rates may be starting to slow sales. Still, signed contracts are 10.9 percent higher than they were a year ago. There is generally a one- to two-month lag between a signed contract and a completed sale.

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Stock Futures Point to a Higher Open on Wall Street

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By IBTimes

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Richard Drew/AP

By Sreeja VN

U.S. stock index futures point to a higher open on Wall Street on Tuesday, ahead of the publication of the House Price Index and corporate earnings statements from tech majors Apple, AT&T and Electronic Arts.

Futures on the Dow Jones industrial average(^DJI) were up 0.3 percent, while futures on the Standard & Poor’s 500 index (^GSPC) were up 0.1 percent and those on the Nasdaq 100 index were up 0.3 percent.

Investors will also be turning their attention to the publication of the Federal Housing Finance Agency House Price Index at 9 a.m. Eastern time. The index provides the monthly average change in house prices across the country or a certain area, using data provided by Fannie Mae and Freddie Mac. The index is expected to nudge up to 0.8 percent in May, from 0.7 percent recorded in the previous month.

In addition, a number of major companies, including United Parcel Service (UPS), Altria Group (MO), Lockheed Martin (LMT), MGIC Investment (MTG), Wendy’s (WEN) will announce quarterly earnings before market hours. Altera (ALTR) and Broadcom (BRCM), along with Apple (AAPL), AT&T (T) and Electronic Arts (EA), will announce their earnings after markets close.

European markets were trading flat after climbing higher earlier Tuesday, as Asian markets rallied following recent reports from China indicating Beijing might take measures to support the country’s economic growth, and the Japanese government upgraded its outlook of the country’s economy for a third consecutive month.

The Stoxx Europe 600 index rose 0.1 percent, London’s FTSE 100 was flat, Germany’s DAX-30 was up 0.1 percent and France’s CAC-40 was trading up 0.05 percent.

In Asia, Chinese stocks led a rally in the region’s markets, with the Shanghai Composite index surging 2 percent while Hong Kong’s Hang Seng Index soared 2.3 percent. Shares jumped after several local media reported that Premier Li Keqiang, at a cabinet meeting last week, gave an assurance that the government won’t allow China’s economic growth to fall below 7 percent.

Japan’s Nikkei ended up 0.8 percent after the government said that the recovery in the world’s third-largest economy had turned self-sustaining, MarketWatch reported. South Korea’s KOSPI Composite index rallied 1.3 percent, Australia’s S&P/ASX 200 added 0.3 percent and India’s BSE Sensex was trading up 0.8 percent in late-afternoon trade.

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Business, Finance, Occupation & Industry

Fed: Manufacturing Picked Up Steam in June

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By Reuters

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Steve Helber/AP

By Paige Gance

WASHINGTON — U.S industrial production rose slightly more than expected in June as manufacturing output picked up speed, a welcome sign for an economy that appears to have slowed sharply in the second quarter.

Output at the nation’s factories, mines and utilities rose 0.3 percent last month after an unchanged reading in May, the Federal Reserve said Tuesday. Economists polled by Reuters had expected a 0.2 percent increase in June.

For the second quarter as a whole, industrial output rose 0.6 percent.

Manufacturing output increased by 0.3 percent last month, beating economists expectation of a 0.1 percent rise, after an upwardly revised 0.2 percent increase in May. Manufacturing was bolstered by a 1.3 percent increase in the production of motor vehicles and parts and a 1.5 percent rise in machinery.

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Mining output jumped 0.8 percent and utilities dropped 0.1 percent, a third consecutive monthly decline.

Industrial capacity utilization, a measure of how fully firms are deploying their resources, was barely changed at 77.8 percent, a rate that lies 2.4 percentage points below its estimated long-run average. Economists had expected a reading of 77.7 percent.

Officials at the Fed look at the utilization measures as a signal of how much slack remains in the economy, and how much room growth has to run before it becomes inflationary.

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Slowdown Has Many Americans Pessimistic About the Economy

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By The Associated Press

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Mark Lennihan/APJob seekers attend a health-care job fair in New York last month. A new poll finds that only 1 in 4 Americans now expects his or her own financial situation to improve over the next year.

By JENNIFER AGIESTA and TOM RAUM

WASHINGTON — For the third year in a row, the nation’s economic recovery has hit a springtime soft spot. Reflecting that weakness, only 1 in 4 Americans now expects his or her own financial situation to improve over the next year, a new Associated Press-GfK poll shows.

The sour mood is undermining support for President Barack Obama‘s economic stewardship and for government in general.

The poll shows that just 46 percent of Americans approve of Obama‘s handling of the economy while 52 percent disapprove. That’s a negative turn from an even split last September — ahead of Obama‘s November re-election victory — when 49 percent approved and 48 percent disapproved.

Just 7 percent of Americans said they trust the government in Washington to do what is right “just about always,” the AP-GfK poll found. Fourteen percent trust it “most” of the time and two-thirds trust the federal government just “some of the time”; 11 percent say they never do.

The downbeat public attitudes registered in the survey coincide with several dour economic reports showing recent slowdowns in gains in hiring, consumer retail spending, manufacturing activity and economic growth. Automatic government spending cuts, which are starting to kick in, also may be contributing to the current sluggishness and increased wariness on the part of both shoppers and employers.

Overall, 25 percent of those in the poll describe the nation’s economy as good, 59 percent as poor — similar to a January AP-GfK poll.

Respondents split on whether this was a “good time” to make major purchases such as furniture and electronic devices, with 31 percent agreeing it was, 38 percent calling it a “bad time” and 25 percent remaining neutral.

The economy’s recovery from the severe 2007-2009 recession has been slow and uneven. Even so, most economic forecasts see continued economic growth ahead, even if it is sluggish and accompanied by only slowly improving levels of joblessness. Another recession in the near future is not being forecast.

In the new poll, few say they saw much improvement in the economy in the last month. Just 21 percent say things have gotten better, 17 percent say they’ve gotten worse and 60 percent thought the economy “stayed about the same.” And the public is split on whether things will get better anytime soon, with 31 percent saying the national economy will improve in the next year, 33 percent saying it will hold steady and 33 percent saying it will get worse. Further, about 4 in 10 expect the nation’s unemployment rate to

From: http://www.dailyfinance.com/2013/04/19/spring-economic-slowdown-americans-pessimism/

Business, Finance, Occupation & Industry

Report Shows Americans Gloomy About the Economy

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By Reuters

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Gene J. Puskar/AP

NEW YORK — U.S. consumer sentiment tumbled to a nine-month low in April, with Americans especially gloomy about the long-term health of the economy, a survey released on Friday showed.

The Thomson Reuters/University of Michigan’s preliminary reading on the overall index of consumer sentiment fell to 72.3 in April, a level last seen in July, 2012, and below economists’ forecasts of 78.5. The index stood at 78.6 last month.

The barometer of current economic conditions fell to 84.8 this month from 90.7, while the gauge of consumer expectations hit 64.2, down from 70.8.

Americans’ long-term outlook was even more gloomy, with many anticipating a higher unemployment rate and lower after-tax income in the year ahead, Richard Curtin, the survey’s director, said in a statement.

But more immediate plans for buying homes and vehicles were positive, Curtin said, while rising home and stock values were expected to support spending this year.

Economists have worried that higher payroll taxes and government belt-tightening could cause consumers to keep a closer watch on their wallets as the year goes on.

Consumer pessimism this month did suppress inflation expectations, with the one-year outlook dipping to 3 percent, the lowest in the past year, from 3.2 percent in March. The survey’s five-to-10-year inflation outlook held at 2.8 percent.

The Federal Reserve has repeatedly pointed to tame inflation expectations and a still fragile labor market as reason to press ahead with its aggressive monetary stimulus.

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From: http://www.dailyfinance.com/2013/04/12/report-shows-americans-gloomy-about-economy/

Business, Finance, Occupation & Industry

Retail Sales Fall Unexpectedly in March Amid Chilly Weather

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By Reuters

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Toby Talbot/AP

WASHINGTON — U.S. retail sales contracted in March for the second time in three months, a sign the American economy may have stumbled at the end of the first quarter.

Retail sales fell 0.4 percent during the month, the Commerce Department said on Friday. That was below analyst expectations that sales would be flat.

Readings for retail sales have been volatile so far this year, making it difficult to know whether the weakness in March was due to a tax hike that went into effect at the start of the year or to temporary factors related to the weather.

Retail sales advanced 1 percent in February, according to revised readings from the government.

Stripping out cars, gasoline and building materials, sales fell 0.2 percent in March. This core measure corresponds closely with the consumer spending component of gross domestic product. The government revised lower past core retail sales figures to show a 0.3 percent gain in February and flat sales in January.

Prior reports on retail sales had made consumers look surprisingly resilient despite tax increases that kicked in on Jan. 1. A tax on payrolls climbed for all workers, while income tax rates rose for the nation’s most wealthy.

Fiscal policy tightened further in March when the federal government began across-the-board spending cuts, part of Washington’s efforts to shrink the budget deficit.

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Non-partisan researchers in the U.S. Congress estimate Washington’s austerity drive will subtract about 1.5 percentage points from economic growth this year.

Many economists have also noted the loss of economic momentum in many economic indicators for March could have been due to a warm winter which may have led companies and consumers to pull forward spending.

Indicators from retail sales and hiring to factory manager confidence were much stronger in February, and a chilly March may have dulled activity.

It is also plausible that economic reports haven’t accurately adjusted for the shift in timing for the Easter holiday, which fell in March of this year after falling in April of 2012.

The weakness in March retail sales was broad based, with car sales down 0.6 percent and receipts from electronics and appliance stores down 1.6 percent. Sales at clothing stores rose just 0.1 percent.

Reporting by Jason Lange; editing by Neil Stempleman.

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From: http://www.dailyfinance.com/2013/04/12/march-retail-sales-fall-unexpectedly/

Science & Technology

Wholesalers Cut Stockpiles to Lowest Level in 17 Months

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By The Associated Press

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Wilfredo Lee/APShipping containers are shown stacked at the Port of Miami in January. Data released Tuesday show U.S. wholesalers cut restocking in February to levels not seen in 17 months.

By CHRISTOPHER S. RUGABER

WASHINGTON — U.S. wholesalers cut their restocking in February by the most in 17 months. But their sales jumped, suggesting companies underestimated consumer demand.

The Commerce Department said Tuesday that stockpiles at the wholesale level declined 0.3 percent in February. That followed a 0.8 percent increase in January, which was revised lower.

The decline was the first in eight months and the biggest since September 2011. Farm products and gasoline led the drop. Agriculture stockpiles have fallen in recent months because of a drought in the Midwest.

Sales at the wholesale level rose 1.7 percent, the most since November. The increase was led by large gains in gasoline, clothes and computers.

Shrinking stockpiles weigh on economic growth because it means factories are producing fewer goods. But a jump in consumer spending in February suggests companies will have to build their stockpiles faster in the coming months, which should spur more growth.

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Sluggish growth in stockpiles was a key reason the economy barely grew in the October-December quarter. But economists are looking for a significant rebound in business restocking this year, helped by a resilient consumer that has continued to spend despite paying higher taxes.

Most economists expect growth accelerated in the January-March quarter to an annual rate of more than 3 percent. That would be a vast improvement over the 0.4 percent growth in the final three months of 2012.

In January, Social Security taxes rose on nearly all Americans who draw a paycheck. The increase leaves a person earning $50,000 with about $1,000 less to spend in 2013. A household with two high-paid workers will have up to $4,500 less.

But Americans spent more in January and February. Many analysts now expect consumer spending rose by about 3 percent at an annual rate in the first quarter. That would be much faster than the fourth quarter’s 1.8 percent pace.

The jump in spending will likely force many companies to order more goods to restock their shelves.

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U.S. Trade Gap Narrows in February on Stronger Oil, Auto Exports

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By The Associated Press

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Patrick Semansky/AP

By MARTIN CRUTSINGER

WASHINGTON — The U.S. trade deficit unexpectedly narrowed in February as exports climbed close to an all-time high and the volume of imported crude oil fell to the lowest level in 17 years.

The gap between exports and imports shrank to $43 billion in February, down 3.4 percent from January’s revised $44.5 billion, the Commerce Department said Friday. It was the smallest trade imbalance since December when the gap had declined to $38.1 billion, the lowest point in nearly three years.

Exports rose 0.8 percent to $186 billion, close to the record high set in December. Stronger exports of U.S. energy products and autos offset declines in sales of airplanes and farm equipment. Imports were flat at $228.9 billion with the volume of crude oil falling to the lowest point since March 1996.

The politically sensitive deficit with China shrank to $23.4 billion, the lowest point in 11 months. Exports to the European Union were down 0.9 percent in February, compared to January, reflecting continued economic weakness as that region struggles with a recession triggered by a debt crisis.

Through the first two months of this year, the U.S. deficit is running at an annual rate of $524.5 billion, down slightly from last year’s $539.5 billion imbalance.

Economists expect the deficit this year will narrow slightly, in part because of continued gains in U.S. energy exports. A narrower trade gap boosts growth because it means U.S. companies are earning more from overseas sales while U.S. consumers and businesses are spending less on foreign products.

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But Paul Dales, senior U.S. economist at Capital Economics, said that he was worried that expectations for exports to keep rising faster than imports may fall short given uncertain global conditions.

“We are concerned that subdued global demand will hold back export growth. And the rest of the data released this week makes us more concerned that the domestic economy is a bit weaker than we thought,” he said.

In a separate report Friday, the government said that the U.S. economy created just 88,000 jobs in March, the fewest in nine months.

The economy as measured by the gross domestic product grew at an annual rate of 0.4 percent in the October-December quarter. Economists believe economic growth strengthened in the January-March quarter to around 3 percent.

In addition to increases in U.S. energy exports, economists are also hopeful that exports of other products will rise this year as well, helped by stronger growth in some major export markets.

Taking a Harder Line on China

That forecast is based on an assumption that the European debt crisis will stabilize, helping boost exports to that region and that growth in Asia will rebound further. The outlook for Europe has been clouded in …read more

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Uneven Recovery Leaves Job, Housing Markets Behind

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By The Associated Press

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Richard Drew/AP

By CHRISTOPHER S. RUGABER

WASHINGTON — From household wealth to spending at stores, many of the U.S. economy’s vital signs have recovered from the damage done by the Great Recession.

Home foreclosures and layoffs have dropped to pre-recession levels. Economic output has rebounded. And the Dow Jones industrial average is in record territory.

So is the economy back to full health? Not quite.

Not with unemployment at 7.7 percent and with 3 million fewer jobs than when the recession began. And while the housing market is improving, that engine of economic growth and job creation still has far to go before it can be declared healthy.

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Perhaps the best way to think about the U.S. economy is this: After five painful years, it’s nearly back to where it started when the recession began. What’s different now is that the trends are much healthier. Gone are the fears that the economy could fall into another recession.

“We’ve made a lot of progress,” says Michael Gapen, senior U.S. economist at Barclays Capital.

The recession officially began in December 2007. It ended in June 2009. Here’s a look at ways in which the economy has returned to pre-recession levels and ways it hasn’t:

What’s Back:

  • Household Wealth: Americans lost $16 trillion in wealth during the recession, mainly because home values and stock prices sank. Those losses have now been reversed. Household “net worth” reached $66.1 trillion in the final three months of 2012, according to the Federal Reserve. That was just 2 percent below the peak reached in the fall of 2007. And steady increases in stock prices and home values so far this year have allowed Americans as a whole to regain all their lost wealth, though many individual families have yet to recover. Increased net worth is vital to the economy because it typically drives more spending. Net worth equals the value of homes, investments, bank accounts and other assets, minus debts such as mortgages, student loans and credit card balances.
  • Retail Sales. Just as household wealth has recovered, so has consumers’ willingness to spend more to shop, eat out or go on vacation. That trend has spurred job growth at retailers and restaurants. Retail sales totaled $421.4 billion in February. Adjusted for inflation, that was nearly 18 percent above the recession low and just 0.7 percent below the record level in November 2007.
  • Layoffs. The job market remains weak by some measures. But consider this: If you have a job, you’re less likely to lose it than at any other point in at least 12 years. That marks a sharp turnaround from the depths of the recession, when layoffs soared – from 1.8 million in December 2007 to 2.6 million in January 2009. In January this year, employers cut 1.5 million jobs – the lowest monthly total in …read more

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Rise in Demand for Aircraft Pushes Factory Orders Up 3% in February

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By The Associated Press

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Matt Rourke/AP Peeps move through the manufacturing process, at the Just Born factory in Bethlehem, Pa., last month. The government reported Tuesday that factory orders increased 3 percent in February, the biggest gain in five months.

By MARTIN CRUTSINGER

WASHINGTON — Orders to U.S. factories rose sharply in February from January on a surge in volatile demand for commercial aircraft. The gain offset a drop in key orders that signal business investment.

The Commerce Department said Tuesday that factory orders increased 3 percent in February. That’s up from a 1 percent decline in January and the biggest gain in five months.

The increase was due mostly to a jump in orders for commercial aircraft. Those orders rose 95.1 percent. Orders for motor vehicles and parts also increased 1.4 percent.

Orders for all durable goods, which are products expected to last at least three years, jumped 5.6 percent. Orders for nondurable goods, such as processed food and clothing, rose 0.8 percent.

Despite the gains, the report showed that a key measure of business investment plans fell. That could mean that some companies were worried in February about steep federal spending cuts that started on March. 1.

Core capital goods, which include machinery and equipment orders, fell 3.2 percent. Demand for construction machinery, turbines and generators all fell sharply. Orders for computers and electronic products rose slightly.

Economists closely watch these orders because they signal business investment plans.

Still, the decline followed a 6.7 percent surge in January, the largest in nearly three years. Analysts said that when averaging the two months, business investment orders showed a solid increase for the January-March quarter. Many expect the gains to resume this spring, helped by a stronger job market that has kept consumers spending.

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Consumers stepped up spending in February after their income jumped. The gain occurred even after Social Security taxes increased in January, reducing take-home pay for most Americans.

Many economists raised their growth forecasts after the report was released. Some are predicting growth could increase to around 3 percent in the January-March quarter, up from 0.4 percent in the previous three months.

Other data show that some companies may start to pull back because of the government spending cuts.

The Institute for Supply Management reported Monday that U.S. manufacturing activity expanded more slowly in March than February, held back by weaker growth in production and new orders.

But factories did hire at the fastest pace in nine months, which was seen as an encouraging sing ahead of Friday’s report on employment in March.

The economy has added an average of 200,000 jobs a month from November through February, which helped lower the unemployment rate in February to a four-year low of 7.7 percent.

Economists predict a similar level of …read more
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The Resurgent Dollar Could Hurt S&amp;P 500 Earnings

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By The Associated Press

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By STEVE ROTHWELL

NEW YORK — The dollar is rising again.

After a drop last autumn, the U.S. dollar has climbed 5 percent against other currencies over the past two months, reaching the highest level since August.

The main reason is the recovery in the U.S. economy. Although growth is still weak, the outlook for the U.S. is better than elsewhere in the developed world. Europe is stuck in a recession and struggling to control its debt. Japan is trying to push down the value of the yen to boost exports and end deflation.

A strong dollar helps Americans by making imports cheaper and curbing inflation, but it can also hurt U.S. companies. Technology companies have become increasingly reliant on overseas sales, and a stronger dollar reduces the value of their overseas earnings.

The impact of the dollar’s appreciation is starting to show up in earnings reports. The insurer Aflac, which does much of its business in Japan, says its earnings were hurt as the yen fell against the U.S. currency. Procter & Gamble, which makes Gillette razors and Crest toothpaste, said the stronger dollar was holding back its sales growth.

Many analysts predict that the dollar will continue to rise. Here’s a look at what a stronger dollar means for investors.

Tough for Tech and Materials Makers

A rising dollar could spell trouble for U.S. companies that make software and gadgets, as well as companies that make basic materials like aluminum.

The tech industry relies heavily on foreign sales for growth. About 56 percent of its revenue comes from outside the U.S., according to research by RBC Capital Markets. As the dollar strengthens, U.S. goods become more expensive overseas, discouraging buyers.

Investors worry that could slow business — and profits. As a result, technology companies are tied with materials makers as the worst industry in the S&P 500 this year, rising just 4.2 percent, compared with 10 percent for the overall market. Business software giant Oracle said its most recent earnings report on March 20 that the rising dollar lowered its earnings by about two percent.

The materials industry, which includes Dow Chemical and miner Cliffs Natural Resources, also gets more than half of its sales overseas.

“We would be wary of sectors that derive a lot of their sales overseas, given that fact that we expect the dollar’s strength to remain,” says Kristen Scarpa, an investment strategist at Barclays Wealth and Investment Management.

Commodity Concerns

When the dollar appreciates, it makes commodities like oil and metals — which are priced only in dollars — more expensive for customers who buy them with other currencies like the euro and the yen.

That can weaken demand for commodities, hurting the profits of the companies that produce them, like oil producers Exxon Mobil, …read more
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Consumers Sentiment Improves Along with Job Market

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By Reuters

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Mark Lennihan/AP Job-seeker Susan Paul shakes hands with a recruiter at a job fair in New York on March 14. A survey released Friday showed consumers are more upbeat about the economy, in part because of an improving labor market.

NEW YORK — U.S. consumer sentiment rose in March from February, as Americans discounted the effects of government budget cuts and instead saw continued healing in the labor market, a survey released on Friday showed.

The Thomson Reuters/University of Michigan’s final reading on the overall index of consumer sentiment came in at 78.6, up from 77.6 the month before.

The final March figure was up sharply from the preliminary reading of 71.8, and above the median forecast of 72.5 among economists polled by Reuters. It was also the highest reading since November.

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Consumer confidence jumped sharply in the second half of the month, erasing the decline of the first half of March, survey director Richard Curtin said in a statement.

That surge came from two factors, he said.

“Consumers have discounted the administration’s warning that economic catastrophe would follow the reductions in federal spending, and consumers have renewed their expectation that gains in employment will accelerate through the rest of 2013.”

The survey’s barometer of current economic conditions rose to 90.7 from 89.0 the previous month and above a forecast of 87.8.

The survey’s gauge of consumer expectations rose to 70.8 from February’s 70.2 and an expected 62.

The survey’s one-year inflation expectation fell to 3.2 percent from 3.3 percent, while the survey’s 5-to-10-year inflation outlook was at 2.8 percent from 3.0 percent.

Reporting By Luciana Lopez; Editing by Chizu Nomiyama.

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U.S. Consumers' Spending Up in February, Data Show

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By Reuters

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Gene J. Puskar/AP

WASHINGTON — U.S. consumer spending rose in February and income rebounded, further signs economic activity accelerated in the first quarter, even though part of the increase in consumption reflected higher gasoline prices.

The Commerce Department said on Friday consumer spending increased 0.7 percent last month after an upwardly revised 0.4 percent rise in January. Spending had previously been estimated to have increased 0.2 percent in January.

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

After adjusting for inflation, spending was up 0.3 percent after advancing by the same margin in January. While Americans paid 35 cents more for gasoline last month, they also bought long-lasting goods such as automobiles and spent more on services, thanks to a bounce-back in income growth.

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Income increased a healthy 1.1 percent after tumbling 3.7 percent in January. A sustained pace of steady job gains is starting to boost wages, which should help to provide some cushion for households from higher taxes and support economic growth.

Personal income in December was sharply higher because of a rush to pay dividends and bonuses before tax hikes took effect this year. That also skewed data for January.

A 2 percent payroll tax cut expired on Jan. 1 and tax rates for wealthy Americans also went up. Data ranging from employment to factory activity has so far shown little sign the tighter fiscal policy has been a major drag on the economy.

First-quarter GDP growth estimates currently range as high as a 3.2 percent annual rate. The economy grew at only a 0.4 percent pace in the fourth quarter.

Last month, the income at the disposal of households after inflation and taxes increased 0.7 percent in February after dropping 4.0 percent in January.

With income growth outpacing spending, the saving rate – the percentage of disposable income households are socking away — rose to 2.6 percent from 2.2 percent in January.

Reporting by Lucia Mutikani; Editing by Neil Stempleman.

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Consumers' Confidence in the Economy Falls in March

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By The Associated Press

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Gene J. Puskar/AP The Conference Board said Tuesday its reading of consumer confidence fell in March after rebounding last month.

Americans are less confident in the economy than they were last month as massive government spending cuts have stoked economic uncertainty.

The Conference Board, a New York-based private research group, said its reading of confidence fell in March after rebounding last month.

The index is closely watched by economists because it makes a monthly gauge of how Americans are feeling about their jobs, incomes and other bread-and-butter issues. That’s important because consumer spending accounts for 70 percent of U.S. economic activity.

The March confidence index fell to 59.7 from a revised reading of 68 in February. That’s also below the 68.7 reading that analysts polled by research firm FactSet expected.

Anxiety about $85 billion in across-the-board government spending cuts that took effect March 1 caused the decline, the group says.

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Demand for Durable Goods Rises Sharply in February

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By The Associated Press

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Mike Groll/AP Washing machines are for sale at Green’s, a furniture and appliance store, in Albany, N.Y. Overall orders for durable goods surged 5.7 percent in February from January, the government said Tuesday.

A surge in commercial aircraft demand pushed orders for U.S. long-lasting manufactured goods up sharply in February. The gain offset a steep drop in orders that signal company investment plans, although economists viewed the decline as a temporary setback.

The broader trend in business investment remains favorable, they noted, and should add to growth in the January-March quarter.

“The picture of business spending to start the year is fairly healthy,” said Dan Greenhaus, chief global strategist at BTIG

Overall orders for durable goods surged 5.7 percent in February from January, the Commerce Department said Tuesday. It was the biggest monthly increase in five months.

A rebound in volatile commercial aircraft orders drove the gain. Those orders rose 95.3 percent after a 24 percent drop in January.

Orders for motor vehicles and parts rose 3.8 percent, the best showing since July. Excluding the volatile transportation sector, orders were down 0.5 percent.

Durable goods are products expected to last at least three years. Orders can fluctuate sharply from month to month.

Economists pay closest attention to orders for so-called core capital goods, which strip out volatile aircraft and defense orders and provide a better indication of the trend in business investment.

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Those orders declined 2.7 percent in February from January. Demand weakened for machinery and communications equipment, but rose for computers. Still, the decline followed a 6.7 percent surge in January, which was the biggest one-month gain in nearly three years. Prior to February’s decline, the category had risen in three of the previous four months.

Greenhaus said that if the big swings in January and February were averaged, orders looked solid for the first two months of the year. He estimates that core orders risen at about a 5 percent rate compared with the final three months of last year.

Peter Newland, an economist at Barclays, said the strength shown in the durable goods report had prompted a slight revision in expectations for overall economic growth in the first quarter to a rate of 2.6 percent, up 0.1 percentage point from the previous estimate.

Many economists were expecting a decline in the core capital goods after January’s impressive gain. The broader trend has been favorable, even with uncertainty surrounding tax and spending policies. Core capital goods orders dipped in December but posted strong gains in November and October.

Nearly all Americans who draw a paycheck began paying higher Social Security taxes on Jan. 1 while income taxes rose for the highest earning workers. And $85 billion in automatic spending cuts started to take effect on March 1, reductions that will mean …read more
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10 Reasons You're Not Feeling Better About the Economy Yet

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By Rich Smith

Woman riding a metro to work. 10 Reasons Why You're Not Feeling Better About the Economy

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(Melanie Stetson Freeman, The Christian Science Monitor via Getty Images)

The Dow Jones Industrial Average (^DJI) capped a historic run last week, closing at new highs all five days, and ending just shy of 14,400. Meanwhile, the Department of Labor reported that 236,000 jobs were created in February, another recent high.

So, America, are you happy now?

The economic experts and the Wall Street analysts all say you should be. Consumer confidence levels are up more than 11 points since January, and judging from the surveys, most people think things are only getting better. The Wall Street Journal says consumers are “freshly flush” from stock market gains, and starting to feel confident enough to take on debt again. The fourth quarter of 2012 saw consumers taking out new loans at their fastest rate since the economy crashed in 2008.

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In short, things are going great, and now that the stock market is up nearly 10 percent in the past two months, everyone would really appreciate it if you’d stop worrying so much, buy some stuff, invest in some stocks, and help keep this rally going.

Your 10-point reality check

And yet, if you’re feeling somehow left out of the party, and wondering if you’re missing something — that somehow, someway, you are the crazy one.

Well, perhaps not. Turns out, once you remove the pink glasses, and don some green eye-shades instead, not everything looks quite so rosy.

What follows are just 10 examples of why you might be feeling down in the dumps when everyone else acts like you should be living high on the hog.

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Motley Fool contributor Rich Smith owns shares of Bankrate.com.

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It's International Women's Day: How Do We Compare on Fiscal Equality?

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By Bruce Watson

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When it comes to best places in the world to be a woman, it’s not surprising that the U.S. falls behind nations like Norway, Sweden, Finland and Denmark. Scandinavian countries, after all, are famed for their impressive social contracts, with the amazing health care and child care benefits that they provide. But you might be shocked to learn that in at least one key metric, American women are being surpassed by those in Mozambique, Mali, Senegal, Tanzania, and 13 other developing nations.

The World Economic Forum’s 2012 report on the global gender gap ranked the U.S. as the 22nd best country in the world. But when it comes to wage equality, the land of the free and the home of the brave drops to 61st, behind Madagascar, Cambodia and Guyana. Women in America earned 67 percent of what men earned. By comparison, women in Sweden earned 69 percent, women in Canada earned 73 percent, and women in Ireland earned 77 percent.

Dig a little deeper into the numbers and it becomes clear what least part of the problem is. In many countries, unmarried women earn more than unmarried men. In Ireland, for example, the average woman without a child earns 17 percent more than the average man. After having children, however, Irish women make more than 10 percent less, on average, than men. In America, the female-to-male pay gap jumps by almost 15 percentage points after children enter the picture.

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The reasons for this decline in wages aren’t hard to figure out. Women with children are more likely to leave the workforce, work part time, or otherwise adjust their schedules to deal with child care. Added to this, the high cost of raising a child — a cost that inordinately falls on women — further cuts into household budgets.

In some countries, there are programs to mitigate these factors. Ireland, for example, has government-mandated paid maternity leave. Then again, so does every other country in the world, except for Papua New Guinea, Swaziland … and the U.S.

And these aren’t the only areas in which the U.S. falls well behind the pack. In terms of labor force participation based on gender, the U.S. is 43rd in the world, behind Uganda, Mongolia and Benin. Put another way, 68 percent of able-bodied, adult American women are at work, while 80 percent of able-bodied, adult American men are at work.

Part of this, again, is due to child-rearing, as America’s lack of publicly-funded child care makes it harder for women in this country to juggle family and work. And the situation looks like it’s going to get worse before it gets better. As The International Business Times reported earlier this week, the sequester budget cuts will further erode women’s health care programs, Head …read more
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Why Smart Investors Should Support Immigration Reform

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By Jeremy Bowman

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In his State of the Union address in February, President Obama outlined a number of initiatives for his second term, including comprehensive immigration reform. The immigration issue has received little beyond lip service in Washington in recent years. But for the first time in a generation, there seems to be political will on both sides of the aisle to pass new immigration legislation.

While this issue is generally framed as a political or cultural one, it holds important fiscal consequences for investors and the corporations in which they are shareholders.

Economics 101

As anyone who has taken an introductory economics class knows, revenue — at its most basic level — is the product of price multiplied by quantity. In order to increase sales, a business can either raise prices or sell more product. In order to sell more product, the business must either find new customers, or sell greater quantities to existing customers.

Since consumer demand is the most important driver of the U.S. economy, this equation is essentially the same with respect to the economy as a whole.

Gross domestic product, though flawed, is the best measure we have of economic growth. It measures the value of all goods and services produced in the country during a given time period. Since Real GDP ignores inflation or the effect of prices going up, the only way to increase GDP is for more goods and services to be consumed.

Growing the population, therefore, is one of the best ways to ensure continued economic growth.

The Baby Bomb

As with revenue, there are two ways to grow the population: Increase the birth rate or increase immigration. Unlike in many of the world’s developed countries, the birth rate in the U.S. has been high enough to support steady population growth during our recent history.

From 1950 to 2010, the U.S. population grew at an annualized rate of 1.2 percent. However, that rate has slowed recently, and population growth during this decade is on pace for the slowest increase since the Great Depression. In 2012, the population grew by just 0.73 percent, and the birth rate dropped to its lowest level since 1920.

Much of the blame lies with the financial crisis and the Great Recession, but it’s important to remember that the decline in population growth can have long-term economic consequences.

The precipice Japan is heading toward offers an example of the potentially catastrophic effects of population decline. That nation is aging faster than any in the world, and the expensive burden of caring for a disproportionately elderly population is only going to grow heavier. On top of that, Japan also officially bans unskilled foreign labor, which has only made its demographic problem worse.

The Immigration Fix

When it comes to the economic impact of immigration, critics often …read more
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The 40 Most Unusual Economic Indicators

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By Business Insider

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The Consumer Consumption Of Beer Index is based on the idea that cash-strapped consumers often try to save money by drinking at home, sending pub sales and jobs downward. (Getty Images)

By Matthew Boesler and Eric Platt,

Every day, public and private data-gathering agencies publish economic reports that are widely reported on by the business media.

GDP, manufacturing, and labor market data all help to inform us about what’s going on in the economy — but there are other things we can look at…

The 40 Most Unusual Economic Indicators originally appeared on DailyFinance.com on 2013-02-21T13:00:00Z.

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