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Consumer Consumption Higher in August. Inflation Index Still Subdued
Personal income was given a slight and unexpected boost in August, while consumption broadly advanced and inflation remained benign, a new report said Thursday.rnrnIncome levels went up 0.2% in August, doubling the consensus forecast, while the prior month’s level was given a bump in revisions too. However, compared to last year income is still down 2.6%.rnrnThe same report also showed consumption climbing. That was expected due to the widely reported success of the cash-for-clunkers program, but the data reveals that spending on autos didn’t drown out all other spending.
Jobless Claims Once Again Above 550k
Three weeks of moderating jobless claims have come to an end as initial claims for unemployment benefits rose 17,000 to 551k in the week ending September 26.rnrnForecasters were expecting 537k claims. The weekly figures can be volatile so it’s no real surprise, only disappointment that another downward surprise was not in store. The prior week’s level, revised up 4k to 534k, was the lowest since early July.
Busy First Day of Fourth Quarter
The fourth quarter begins today with a torrent of fresh data, plus speeches from Fed chairman Ben Bernanke and Atlanta Fed president Sandra Pianalto.rnrnAhead of the data, a slowdown in global equity markets has the US futures market looking downwards, while the dollar is looking stronger and the Treasury market is stable.rnrn“Despite yesterday’s mild setback, the Dow just racked up its best quarter in 11 years and best third quarter since 1938 with a 15% advance,†notes Sal Guatieri from BMO Capital Markets. “For an encore, less-bad news and economic stabilization probably won’t cut it any longer,†he added. “The
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