This Week's Economic Roundup
The mood of small-business owners has picked up heading into the holiday shopping season, even as consumers are growing more concerned about the long-term outlook for jobs and the economy. Here's a look at this week's economic developments and how they may impact your business.
Small-Business Outlook Brightens
After months of sagging optimism, small-business owners were in a better mood in November, according to a survey released Monday by Discover.
In a survey of 1,000 business owners nationwide, 49 percent described the economy as excellent or good, a five point increase from October, while 45 percent said they expected conditions to improve over the next six months, the survey found.
"Small-business owners are more optimistic and plan to invest further in themselves in the near term," Sastry Rachakonda, the director of Discover Business Card, said in a statement.
At the same time, consumer confidence continued to slide in November, driven by a tighter labor market, the Conference Board reported on Tuesday.
In a survey of 5,000 households across the country, only 26.5 percent felt current economic conditions were "good," down from 27.9 percent in September, the New York-based private research group said. Another 22.4 percent said jobs were hard to get, while fewer expected jobs to become available in the next six months, the survey found.
Lynn Franco, director of the group's research center, described the mood as a "more guarded short-term outlook."
Spending, Incomes Rise
Both personal incomes and consumer spending increased in October, as prices continued to rise, the Commerce Department reported Thursday.
Personal income rose by 0.4 percent, the slowest pace since June, while spending rose by 0.2 percent following a 0.2 percent decline in September, the report said.
Excluding food and energy prices, core consumer prices have increased by 2.4 percent in the past 12 months, the report said.
Economic Growth, Factory Orders Down
Increased imports slowed the pace of economic growth to 2.2 percent over the third quarter, the Commerce Department reported Wednesday.
The modest gains in gross domestic product -- the total output of all goods and services produced in the U.S. -- were credited to an increase in spending and exports, the report said.
Following unexpected gains in September, new orders for durable goods plunged by 8.3 percent in October to $210 billion, the Commerce Department said on Tuesday.
The declines were blamed on a demand for civilian aircraft, which fell by 44.5 percent, the report said. Excluding those losses, orders for core capital goods were down by 5.1 percent, the report said.
Home Sales Bounce Back
After eight months of declines, sales of existing homes rose unexpectedly rose in October by 0.5 percent, the National Association of Realtors said on Tuesday.
Despite the gains, which pushed the seasonally adjusted sales rate to 6.24 million units per year, year-over-year sales were down 11.5 percent, the report said.
"After a period of price adjustment, we'll see more confidence in the market and a lift to home sale should be apparent in the first quarter of 2007," David Lereah, the group's chief economist, said in a statement.
Meanwhile, new-home sales continued to fall, dropping 3.2 percent in October to a seasonally adjusted rate of 1.004 million units per year, the Commerce Department reported on Wednesday.
In the past year new-home sales have fallen 25.4 percent, while median prices have climbed 2 percent to $248,500, the report said.
In October, there were 558,000 new homes left on the market, enough for a 7-month supply at the current sales pace, the report said.
Jobless Claims Surge
New claims for unemployment benefits rose last week by 34,000 to 357,000, the highest level in over a year, the Labor Department said Thursday.
The largest number of new claims for the week ending Nov. 18 was in California, Illinois, and Pennsylvania, the agency said.