This Week's Economic Roundup
Lower energy prices helped brighten the mood for small-business owners heading into the holiday season, while keeping consumer prices down. Here's a look at this week's economic developments and how they may impact your business.
With energy prices and fears of widespread inflation easing, small-business owners had a brighter outlook on the economy in October, the National Federation of Independent Business said Tuesday.
A net 11 percent of owners surveyed in October said they expected the economy to improve in the months ahead, the Washington-based lobby group said. Typically, about a quarter of the group's 600,000 members respond to the monthly surveys.
Five of 10 components of the group's small-business optimism index improved in October, including plans to increase capital outlays and inventories, while expectations of higher sales were unchanged from September.
Also in October, the number of businesses raising prices fell four points to a net 16 percent, the survey said.
"Price pressures are fading, and it's not just the construction sector that is bringing the pressures down," William Dunkelberg, the group's chief economist, said in a statement. "Retail inflation is easing as well."
Consumer Prices Fall
Driven by lower energy costs, consumer prices dropped by 0.5 percent in October, the Labor Department reported Thursday.
Yet excluding a 7 percent decline in energy prices, so-called core consumer prices rose 0.1 percent, the report said.
Consumers paid more for food and beverages, education, and health services, while housing prices were unchanged, the report said.
Meanwhile, customer satisfaction in the quality of U.S. goods and services remained steady over the third quarter, the University of Michigan reported Tuesday.
The American Customer Satisfaction Index, a closely watched gauge of future consumer spending habits, was unchanged from the previous quarter at a near record-high of 74.4 on a 100-point scale. The index is based on aggregate scores on a range of criteria awarded to more than 200 businesses across several commercial sectors.
"High levels of buyer satisfaction suggest higher spending, but consumers' inclination to spend is always tempered by the availability of cash and credit," Claes Fornell, a University of Michigan researcher who prepares the index, said in a statement.
Consumer spending grew by 3.1 percent over the third quarter, according to preliminary estimates by the Commerce Department.
Industrial Production Picks Up
Led by a higher demand for utilities, computers, and electronics, industrial production rose 0.2 percent in October after declining the previous month, the Federal Reserve said Thursday.
Capacity utilization across all industries was up by 0.1 percentage points to 82.2 percent, 1.2 points above its annual average since 1972, the Fed said.
Jobless Claims Fall
The number of new claims for unemployment benefits dropped by 2,000 last week to 308,000, the Labor Department reported Thursday.
In the week ending Nov. 4, the seasonally adjusted insured unemployment rate was 1.9 percent, unchanged from the previous week, the report said.
The sharpest decreases in new claims were in Missouri, Indiana, and Mississippi, while the highest gains were reported in Michigan, Georgia, and Texas.