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Labor Market Gains Help Brighten Americans’ Outlook

*from www.bloomberg.com, Mar. 7, 2013 (To view original article click here.)

Take Away #1: Applications for unemployment benefits in the U.S. unexpectedly declined to a six-week low.

Key Facts and Figures:

  • First-time jobless claims fell by 7,000 to 340,000 in the week ended March 2, pushing the monthly average to a five-year low.
  • The Bloomberg Consumer Comfort index improved for the fifth week as the share of Americans with a positive view of the economy held at the highest since early 2008.
  • A report tomorrow is projected to show employers took on more workers in February than a month earlier.
  • Increased hiring helps to sustain wage gains needed to propel the consumer spending that makes up 70% of the economy.

Take Away #2: The housing recovery and advancing stock prices are making it easier for households to tolerate higher payroll taxes and Federal spending cuts.

Key Facts and Figures:

  • Gains in home prices contributed a 1.8% increase in household wealth during the fourth-quarter, giving Americans the confidence to spend more.
  • Stocks rose, sending the Dow Jones Industrial Average to another record high, advancing 0.2% to 14,327.22 at 2:35 p.m. in New York.
  • Treasuries declined, pushing the yield on the 10-year note up 1.99% from 1.94% late yesterday.

Take Away #3: U.S. trade deficit widened more than forecast in January as demand for imported crude oil rebounded.

Key Facts and Figures:

  • The gap grew by 16.5% to $44.4 billion from $38.1 billion in December, which was the smallest deficit in three years.
  • The median forecast in a Bloomberg survey called for the deficit to increase $42.6 billion.

Take Away #4: American’ sentiment has improved even as higher payroll taxes take a bigger bite out of worker’s paychecks.

Key Facts and Figures:

  • In addition to higher payroll taxes the levy that funds Social Security reverted back to 6.2% from 4.2% as of January.
  • The buying-climate index improved to minus 40, the highest this year from minus 41.3 the prior week.
  • 30% said it was a good time to buy things that they want or need, the highest level since December.
  • Improved attitudes on the economy may reflect a rebound in the housing market, with a pickup in demand that is driving prices higher.
  • The S&P/Case-Schiller index of property values in 20 U.S. cities increased 6.8% in December from the same month in 2011, the biggest year-to-year gain since July of 2006.
  • Gasoline prices have leveled off, with the average price of a gallon of regular gasoline yesterday at $3.72, according to AAA.
  • Prices are still up from a low of $3.22 on Dec. 19, but down from $3.79 a gallon on Feb. 26 and have dropped eight days in a row.

Take Away #5: Labor Department figures show productivity fell while labor expenses accelerated.

Key Facts and Figures:

  • The productivity of U.S. workers fell in the fourth-quarter by the most in four years.
  • Labor expenses accelerated as companies added workers and boosted hours.
  • The measure of output per hour fell at 1.9% annual rate after a 3.1% third quarter gain.
  • Expenses per worker rose at a 4.6% rate.

*To view original article from www.bloomberg.com click here.

Filed in: Economy, Latest

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