This Week's Economic Roundup
Cash-flow issues and economic uncertainties continue to damper the mood of small-business owners, even as they continue to lead other sectors in job growth. Here's a look at this week's economic developments and how they may affect your business.
Owner Optimism Down
Rising insecurities and cash-flow issues had more small-business owners concerned with the direction of the economy in April, Discover Financial Services reported Monday.
Of 1,000 small-business owners polled nationwide last month, 55 percent said they believe economic conditions getting worse, up from 51 percent in March, the report said.
Thirty-two percent of respondents said business conditions in their markets were declining, while 40 percent said they had experienced cash-flow problems over the past few months, the survey found.
Despite the declines, which were spread across all business segments tracked by Discover, 44 percent of owners polled said they were still planning to increase spending in the months ahead.
Small-Business Payrolls Up
The nation's small businesses added 45,000 new jobs to their payrolls in April, driving a net 64,000 growth in total private-sector jobs in April, according to the ADP National Employment Report.
By contrast, large firms cut 10,000 jobs, the fourth straight month of declines, the report said.
Total employment grew by 106,000 jobs in the service sector, while declining by 42,000 in the goods-producing sector, the report said.
Private-sector job growth has averaged just 76,000 over the past three months, about half the average of the three months leading to January.
Meanwhile, online job ads rose 24 percent since April 2006, the Conference Board reported on Wednesday.
Last month, there were close to 4.4 million jobs posted online, an increase of 16 percent from the previous month and representing roughly 2.9 vacancies for every 100 persons in the labor force, the report said.
Personal Income, Prices Up
Personal income rose by 0.7 percent to $79.9 billion in March, while prices rose by 0.4 percent, the Commerce Department reported Monday.
Wages and salaries, which make up the largest component of personal income, rose by 0.7 percent, compared to 0.5 percent in February, the report said. Payrolls at goods-producing industries surged by $11.5 billion, compared to just $1.5 billion in February, while manufacturing payrolls increased by $5.7 billion, the report said. Excluding taxes, total disposable personal income rose by 0.7 percent to $65.5 billion.
Consumer spending, adjusted for dollar-value changes, fell by 0.2 percent after increasing by 0.3 percent in February. Analysts cited rising gas prices for the weak gains in spending.
Pending Home Sales Down
Amid continuing decline in the housing market, pending sales of existing homes fell by 4.9 percent in March to a four-year low, the National Association of Realtors reported Tuesday.
Pending home sales, a forward-looking gauge of the housing market based on signed sales contracts for future closings, were down 10.5 percent from the previous year, the report said.
"Although the weather improved in March, we're starting to see the effects of a decline in subprime lending and tighter lending standards," David Lereah, the group's chief economist, said in a statement.
Gas Prices Rising
After keeping steady last week, average gas prices across the nation jumped by 10.2 cents to $2.97 per gallon in the week beginning April 30, the Energy Information Administration reported Wednesday.
Gas prices are now 5.2 cents higher than the same week last year. Higher prices were reported in every region, including a 15 cent increase in the Midwest. At the same time, prices in California hit a record-high $3.35.9 per gallon.
Jobless Claims Drop
The number of new claims for unemployment benefits last week dropped by 21,000 to 305,000, the Labor Department reported Thursday.
There were 2.495 million people filing jobless claims over the week ending April 21, a decrease of 0.1 point to 1.9 percent in the advance seasonally adjusted insured unemployment rate, the report said.
The biggest decreases last week were in New York, New Jersey, and Wisconsin, while increases were reported in Massachusetts, Michigan, and Connecticut.