Slew of positive reports show US economy still on solid track

0
An American flag hangs above a worker operating a forklift at the Stihl Inc. manufacturing facility in Virginia Beach, Virginia, on Jan. 11, 2018. (Luke Sharrett/Bloomberg)

The U.S. economy is doing just fine, thank you.

A string of reports on Thursday showed the labor market is getting stronger, consumers are increasingly optimistic and manufacturers are expanding, adding to signs that gross domestic product remains on track for a solid performance in the third quarter.

Filings for unemployment benefits unexpectedly fell for a third straight week to a new 48-year low, as businesses hold on to existing staff amid a shortage of skilled workers, according to Labor Department figures. That’s a good sign for the September payrolls report: The claims data, covering the week containing the 12th of the month, coincide with the reference period for the Labor Department’s survey for the monthly figures.

The Bloomberg Consumer Comfort Index showed sentiment advanced last week to a fresh 17-year high on brighter views of the economy, personal finances and the buying climate. In addition, the report’s monthly economic expectations index rose to 57.5 in September, the highest since March 2002.

A gauge of manufacturing from the Federal Reserve Bank of Philadelphia rebounded by more than projected in September from the lowest level in almost two years, as orders, shipments and employment picked up. At the same time, price pressures are easing, as a gauge of input prices fell to the lowest since January.

Some of the news was less upbeat: Sales of previously owned homes were unchanged in August from the prior month at a 5.34 million annual pace, trailing economists’ estimates, data from the National Association of Realtors showed. Even so, that ended a streak of four consecutive monthly declines. Home prices remain high, though slowing sales led to the first annual rise in inventory in three years.

The economy is nonetheless facing some headwinds, including an intensifying trade war that could weigh on consumer moods and lift inflation as the Trump administration proceeds with tariffs on $200 billion in Chinese goods starting next week. The Federal Reserve is expected to raise interest rates next week, which could boost borrowing costs for businesses and consumers.

Also, the damage and flooding from Hurricane Florence may affect some indicators — such as employment and housing — though rebuilding should give a boost to the economy later on.

Advertisement