The Economy This Week
A rebounding stock market is giving the economy a much-needed boost, though continued declines in the housing and job markets might signal trouble ahead. Here's a look at this week's economic developments and how they may affect your business.
Leading Indicators Up
Higher stock prices helped boost the index of leading economic indicators by 0.3 percent in September, only the third increase in the last six months, the Conference Board reported on Thursday.
Overall, seven of 10 index components improved last month, including vendor performance, factory orders, and consumer expectations, the New York-based private research firm reported. Those gains were offset by continued declines in building permits and interest rate spread, while average weekly manufacturing hours remained steady.
The leading index, which gauges the state of the economy in the months ahead, has alternated between gains and losses over the past six months, remaining essential unchanged from March.
At the same time, the coincident index, which measures current economic conditions, has grown steadily by 1 percent, with all four index components improving in September.
Consumer Prices Rise
Higher food prices pushed overall consumer prices up by 0.3 percent in September, following declines the previous month, the Labor Department reported Wednesday.
Excluding food and energy prices, core consumer prices rose by just 0.2 percent. Prices were up for apparel, medical care, and recreation, among other goods and services. In the past year, core prices have climbed by 2.1 percent.
Housing Starts Plunge
Continued turmoil in the mortgage market drove housing starts down by 10.2 percent in September to an adjusted annual rate of 1.191 million, the Commerce Department reported Wednesday.
Housing starts, which indicate the direction of the housing market in the months ahead, have now dropped by 30.8 percent in the past year.
Also down in September were building permits, by 7.3 percent from August, and housing completions, by 8.2 percent.
"Builders are taking the necessary steps to narrow the supply of unsold units on the market as buyer demand continues to be adversely affected by tightened lending standards and concerns about negative media reports on the housing market," Brian Catalde, president of the National Association of Home Builders, said in a statement.
Gas Prices Dip
Average gas prices across the nation fell by 0.8 cents last week to $2.762 per gallon, the second straight week of declines, the Energy Information Administration reported Wednesday.
Gas prices were lower in every region except the West Coast, where they climbed by 4.5 cents to $2.979 per gallon, the highest regional prices in the country. In California, prices inched up past the $3 per gallon mark and were more than 50 cents higher than the same period last year.
The cheapest gas prices last week were in the Gulf Coast, where prices dropped by 2.5 cents to $2.642 per gallon,
Jobless Claims Up
After keeping steady in recent months, the number of new claims for unemployment benefits soared by 28,000 last week to 337,000, the Labor Department reported Thursday.
The advance seasonally adjusted unemployment rate the previous week was unchanged at 1.9 percent, with some 2.534 million people filing jobless claims.
The largest gains in new claims last week were in California, Georgia, and Kentucky, while the largest declines were in Louisiana, North Carolina, and Maryland.