The Economy This Week
Small-business owners were in a brighter mood in February, despite ongoing declines in the housing and labor markets. Here's a look at this week's economic developments and how they may affect your business.
Small-Business Optimism Up
The economic outlook of the nation's small-business owners improved in February, prompting many to boost spending plans for the months ahead, Discover reported Monday.
In a survey of 1,000 owners nationwide, 34 percent said conditions for their businesses were getting better, up from 31 percent in January, while 33 percent said they planned to increase spending on business development, up from 28 percent.
"Small-business owners are seeing some of the larger efforts being made to improve the economy, such as the Fed interest rate cuts and slowing down of downward momentum," Sastry Rachakonda, the director of Discover's business credit card, said in a statement.
By contrast, a separate survey by PricewaterhouseCoopers this week found the nation's top private company executives growing more pessimistic about economy.
Of more than 250 CEOs surveyed in both the service and manufacturing sectors over the fourth quarter, only 29 percent had a positive outlook on the economy, the lowest level since the quarterly surveys were launched 16 year ago. Likewise, the Conference Board on Tuesday reported a five-year low in consumer confidence.
Home Sales FallingSales of new and previously owned homes continued to fall in January, separate reports showed this week.
New single-family home sales dropped by 2.8 percent from December to a seasonally annual rate of 588,000, the Commerce Department reported Wednesday.
The median price for a new home last month was $216,000, a decline of $9,400 from a month earlier. There were 486,000 new homes left on the market at the end of the month, representing a 9.9 month supply at the current sales pace.
At the same time, sales of previously owned homes fell by 0.4 percent to a seasonally adjusted annual rate of 4.89 million, the National Association of Realtors reported Monday.
Previously owned homes have fallen by 23.4 percent from the same period last year. In that time, median prices have dropped by 4.6 percent to $201,000. By the end of January, there were 4.19 million existing homes on the market, a 10.3 month supply at the current sales pace.
"We should see some movement of pent-up demand by this summer, but higher loan limits need to be implemented fully and promptly to have maximum benefit," Richard Gaylord, the trade group's president, said in a statement.
Jobless Claims SurgeThe number of new claims for unemployment benefits last week surged by 19,000 to 373,000, the Labor Department reported Thursday.
The advance seasonally adjusted insured unemployment rate the previous week was 2.1 percent, reflecting an upturn of 21,000 jobless claim filers to 2.807 million.
The largest increases in news claims last week were in North Carolina, Wisconsin and Louisiana. Declines were reported in California, Kentucky and Illinois.