Personal Incomes Rise More Than Expected and Manufacturing Index Hits 5-Year High
The Commerce Department said Monday that incomes rose by 0.4%, the sixth increase in a row. That’s slightly better than analysts expectations of 0.3% growth.
Income growth was spurred by a large, one-time social security payment. Wages and salaries rose by only 0.1% in December, or $9.1 billion, after increasing 0.4%, or $27 billion, in November.
Consumer spending, meanwhile, increased by 0.2%. That was less than analysts’ forecasts of a 0.3% gain. Commerce also revised November’s figure to show a 0.7% increase in spending, higher than the initial estimate of 0.5%.
Consumer spending is closely watched because it accounts for about 70% of total economic activity. In last year’s fourth quarter, consumer spending rose by 2%. That was down from a 2.8% increase in the July-September period.
The Q4 gain helped boost the nation’s gross domestic product by 5.7% — the fastest growth in six years. [Read the full article]
Manufacturing expanded in January at the fastest pace in more than five years, according to a key report Monday, boosting hopes the recovery is on a sustainable path.
The Institute for Supply Management’s manufacturing index rose 3.5 points to 58.4, the highest since August 2004. Wall Street had expected 55.5. Readings greater than 50 indicate expansion.
Now 13 of 18 industries expanded, up from nine in December, “significant assurance that the manufacturing sector is in recovery,” Norbert Ore, chairman of the ISM survey, said in a statement.
Other reports showed U.K. [Read the full article]
The National Association of Realtors says its seasonally adjusted index of sales agreements rose 1% from November to December to a reading of 96.6. That was a little lower than the 97.1 level analysts expected, according to Thomson Reuters.
The index has risen for nine out of the past 10 months as buyers scrambled to take advantage of an $8,000 first-time homebuyer tax credit before its scheduled expiration Nov. 30.
The index tracks contract signings of existing homes, so it indicates what actual existing home sales might be a month or two later. The report suggests the housing market has stabilized after pending sales dived a revised 16.4% in November amid uncertainty over the homebuyer tax credit.
After manufacturing activity in the U.S. reached a 5-year high, factory production around the world expanded in Jan. as economies slowly emerged from recessions. [Read the full article]