The Economy This Week
Despite an upturn in personal income, weaker stock prices and rising jobless claims are pointing to harder times ahead this winter. Here's a look at this week's economic developments and how they may affect your business.
Leading Indicators Down
Driven down by financial market turmoil and sagging consumer expectations, the index of leading economic indicators declined in November by 0.4 percent, the Conference Board reported Thursday.
The index, a gauge of future economic growth, has now declined in four of the past six months.
Only three of 10 components improved last month, including vendor performance, average weekly manufacturing hours, and new orders for nondefense capital goods, the New York-based research group said. Those gains were offset by weaker stock prices and an upturn in jobless claims, among other factors.
In the past six months, the index has decreased by 1.2 percent, the sharpest drop in six years.
Personal Income Rising
U.S. personal income increased by 1.4 percent in the third quarter, up from just 0.9 percent, the Commerce Department reported Wednesday.
Income growth accelerating or held steady in all but 11 states. The largest third-quarter gains were in Washington, where incomes grew by 3.6 percent, followed by New Mexico and Louisiana, the report said. Minnesota, Michigan and Maryland saw the weakest growth.
Quarterly income rates tend to swing as a result of year-end bonuses paid in the financial industry in the first quarter.
Gas Prices Drop
Average gas prices fell below $3 per gallon last week for the first time in over a month, dropping by 0.2 cents to $2.998 per gallon, the Energy Information Administration reported Wednesday.
Despite weeks of declines, gas prices remain 67.8 cents higher than at the same period last year. Cheaper prices were reported in every region except the Midwest, where prices rose by 4.8 cents to $2.943 per gallon. Prices in California remained the nation's highest at $3.285 per gallon, 4.4 cents lower than the previous week.
Jobless Claims Up
The number of new claims for unemployment benefits rose by 12,000 last week to 346,000, the Labor Department reported Thursday.
The seasonally adjusted insured unemployment rate the previous week was unchanged at 2 percent, with 2.646 million people filing jobless claims.
The largest gains in new claims last week were in Illinois, Ohio, and Kentucky, while the largest declines were in New York, North Carolina, and Pennsylvania.