On the eve of America’s annual day of Thanksgiving, there’s at least some better economic news to toast than what we’ve seen in a while.
Today, the U.S. Labor Department reported that initial claims for unemployment fell last week to the lowest point since July 2008. In another report, the U.S. Commerce Department said Americans increased their spending for the fourth consecutive month in October. Personal income also rose, as did disposable income, tangible evidence that the improving optimism in recent surveys is real.
In fact, one of those consumer sentiment surveys, the Reuter’s/University of Michigan’s Consumer sentiment index, surprised economists by coming in at 71.6, a full point higher than the most optimistic of the predictions. It was 67.7 last month. The survey tracks with the Conference Board’s venerable Consumer Confidence Index, which rose 1.6 points in October.
From a jobs perspective, the more telling Employment Trends Index (also from The Conference Board) is at 98.1, up .8 from September, but up 10 percent over the last year. This index is considered by many economists to be an especially useful indicator of hiring trends, since it takes into account eight labor market indicators, including unemployment claims, temp hirings, job openings, and data from the consumer confidence survey.
The reports prompted Mark Vitner, a senior economist at Wells Fargo Securities LLC, to tell Bloomberg, “It really looks like a recovery here. Wages and salaries are strengthening, and we have really good momentum going into the holiday season.”
Holiday hiring is the strongest since 2006, says global outplacement firm Challenger, Gray & Christmas. The firm’s analysis of labor market data says retailers added 150,900 jobs in October versus 47,600 last year. Retailers continue to hire in November and December, leading the company to predict that seasonal job growth will top 600,000.
Next week will provide economists more grist for their predictions for 2011. The Conference Board will release its report Wednesday on employment ads posted during the month. On Tuesday, its consumer confidence index for November will be out. Then comes ADP’s National Employment Report, foreshadowing the most closely watched jobs data of each month, the U.S. Bureau of Labor Statistics’ monthly Employment Situation. This is the report that announces the unemployment rate and offers significant other data on current employment in the U.S.