U.S. jobs picture improving, manufacturing may be slowing

Corporate recruiters (R) gesture and shake hands as they talk with job seekers at a Hire Our Heroes job fair targeting unemployed military veterans and sponsored by the Cable Show, a cable television
Corporate recruiters (R) gesture and shake hands as they talk with job seekers at a Hire Our Heroes job fair targeting unemployed military veterans and sponsored by the Cable Show, a cable television

The number of Americans filing new claims for unemployment aid unexpectedly fell last week, but continued weakness in business spending on capital goods suggested slower economic growth in the fourth quarter.

Initial claims for state jobless benefits fell 10,000 to a seasonally adjusted 316,000, the Labor Department said on Wednesday. The second straight week of declines defied economists’ expectations for a rise in claims to 330,000 and raised hopes for strong payroll growth in November.

“We are at a level that, if sustained, would point to solid job gains ahead. There is also a good chance that the October payroll gain may not have been an aberration,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.

Employers added 204,000 new jobs to their payrolls last month, far more than expected, fanning speculation that the U.S. Federal Reserve might start to wind down its economic stimulus sooner rather than later.

The improving labor market tone has helped to boost consumer sentiment. The Thomson Reuters/University of Michigan’s final reading on the overall index on consumer sentiment increased to 75.1 for November, up from a final reading of 73.2 in October.

The preliminary November reading of the overall index was reported at 72.0 earlier this month.

But while the labor market picture is firming, businesses appear to be cautious about investment spending.

A separate report from the Commerce Department showed non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, dropped 1.2 percent last month.

It was the second monthly decrease in these so-called core capital goods. The data surprised Wall Street economists who had expected a gain, partly because private surveys of national factory activity had shown strength in October.

“The picture of manufacturing strength from survey data is not being captured in the government-collected data on new orders and this divergence is a puzzle,” said John Ryding, chief economist at RDQ Economics in New York.

Nevertheless, the latest report suggested some ebbing in the factory sector’s momentum, and hinted that a 16-day partial government shutdown last month hurt business confidence.

Trimming GDP Forecasts

Shipments of core capital goods, used to calculate equipment spending for the government’s measure of gross domestic product, fell 0.2 percent for a second consecutive month.

The drop suggested investment in equipment would probably not rise much this quarter after falling in the third quarter for the first time in a year.

Economists at Morgan Stanley trimmed their fourth-quarter GDP growth estimate by two-tenths of a percentage point to 1.2 percent on the data. Barclays lowered its forecast to 1.7 percent from 1.8 percent.

“Investment has slowed, but it’s going to be temporary,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “As long as there is no policy misstep, we will start to see investment pick up.”

The report showed overall orders for durable goods – items from toasters to aircraft that are meant to last at least three years – fell 2 percent, largely because demand for civilian and defense aircraft tumbled.

Durable goods orders had increased 4.1 percent in September.

A fourth report showed some easing in the pace of factory activity in the Midwest this month, although it remained strong and showed factory employment surged to a one-year high.

The Institute for Supply Management-Chicago business barometer fell to 63.0 from 65.9 in October. A reading above 50 indicates expansion in the regional economy, which is dominated by automobile production.

Along with the drop in new claims for jobless benefits, the data helped lift stocks on Wall Street in light trading ahead of Thursday’s Thanksgiving holiday. U.S. Treasury debt prices fell, while the dollar rose marginally against a basket of currencies.

A number of other regional factory reports for November had suggested the sector had taken a step back, and even the reading for the Midwest showed weaker new orders and order backlogs.

Economists say a strong inventory build-up in the third quarter is likely weighing on activity.

“Businesses were caught off guard by the softening in demand. Some of the build-up in inventories was unwanted, so that is going to lead to weak production early this quarter,” said Moody’s Analytics’ Sweet.

(Reporting by Lucia Mutikani; Additional reporting by Rodrigo Campos in New York; Editing by Krista Hughes)



News
Entertainment
Sports
Lifestyle
National

Mutant worms stay sober, even on alcohol

U.S. researchers have developed "mutant worms" that do not get drunk by alcohol, a breakthrough that could lead to new treatment for people trying to quit drinking

Local

K-9 nose helps capture $150K in cocaine at…

A furry, four-legged security agent helped authorities stop an illegal cocaine shipment from sneaking past JFK customs.

National

Minnesota man asked to leave Southwest flight after…

A man and his two sons were asked to leave a Southwest Airlines flight after the man sent a tweet complaining about being treated rudely by a gate agent.

National

Man sues hospital after surprise penis amputation

An Alabama man who went in to a hospital last month for a circumcision awoke after surgery to find his penis had been amputated, his lawyer said on Thursday.

Movies

Review: Brett Ratner's big 'Hercules' movie is small…

The latest "Hercules," starring Dwayne Johnson as the half-god beefcake of Greek myth, strips its hero and tale of most of its fantastical elements.

Arts

Scientists recreate world's smallest Monet copy

Scientists have reproduced a famous Impressionist painting using nano-printing, to create what has been described as the world's smallest work of art. Reworked at the…

Television

Jerry Seinfeld is ambidextrous, and other Reddit AMA…

See some of the weirder highlights of Jerry Seinfeld's recent Reddit AMA.

Going Out

Grab a pedestrian and start dancing at What…

As a New Yorker, I’ve mastered the art of focusing my gaze straight ahead. Though it occasionally piques my interest, the absurdities that play out…

NFL

2014 NFL Fantasy Football Top 100 overall player…

2014 NFL Fantasy Football Top 100 overall player rankings

U.S. Soccer

NYCFC announce signing of Frank Lampard

The tease of a big signing Thursday by new MLS side NYCFC ended up being one rumored for weeks. England midfielder Frank Lampard agreed to…

NBA

NBA great LeBron James sends 800 cupcake apologies…

By Kim PalmerCLEVELAND (Reuters) - NBA star LeBron James, whose recent return to the Cleveland Cavaliers in his home state of Ohio sparked a frenzy…

NFL

Jerry Reese confident with Giants, skipping countdown clocks…

Last year, Giants GM Jerry Reese installed a countdown clock in the locker room to inspire Big Blue to play in their own stadium for Super Bowl XLVIII.

Tech

Forget Wi-Fi: Li-Fi could be the future

Li-Fi technology – developed by Mexican company Sisoft – is wireless internet connectivity using specialized LED light.

Tech

Weather app Climendo might be the most accurate…

The wait for a truly accurate weather forecast could finally be over thanks to a nifty new app called Climendo.

Tech

Napkin Table puts focus off the phone and…

Michael Jan, a design student at Tunghai University in Taiwan, has invented a serviette-picnic blanket hybrid called the Napkin Table.

Style

Essie's new Color Boutique

Essie launches high-tech kiosks at major airports and malls across the country.