Consumer spending up
Thursday, October 01, 2009 at 9:01 a.m.
Read more: National, Economy
WASHINGTON (AP) -- First-time claims for jobless benefits rose more than expected last week, a sign employers are reluctant to hire and the job market remains weak.
The Labor Department says initial claims for unemployment insurance rose to a seasonally adjusted 551,000 from 534,000 in the previous week. Wall Street economists expected an increase of 5,000, according to a survey by Thomson Reuters.
The increase comes after three weeks of declines. Weekly claims have been trending down since the spring, but the decline has been painfully slow. The four-week average, which smooths out fluctuations, dropped to 548,000, about 110,000 below its peak in early April.
The number of people remaining on the rolls fell 70,000 to 6.09 million, the lowest level since the week of April 4.
Meanwhile, consumer spending, propelled by the wildly popular Cash for Clunkers auto sales program, shot up in August by the largest amount in nearly eight years even though personal incomes continued to lag.
The Commerce Department says that consumer spending rose 1.3 % in August, even better than the 1.1 % gain that had been expected. Incomes continued to lag, edging up 0.2 % in August, the same as the July increase.
The big jump in consumer spending, which accounts for 70 percent of total economic activity, is a good indication that the economy was returning to positive growth this summer. But economists are worried that any rebound from the recession could falter if income growth does not improve.
(Copyright ©2009 by The Associated Press. All Rights Reserved.)
