Question
read the following article and underline the information that helps you determine the current status of the economy. You will not know what all the
read the following article and underline the information that helps you determine the current status of the economy. You will not know what all the terms mean, but look for statistics, trends, and key terms that can provide clues about the current economic situation.
Jobless claims rise; spending, incomes up too
New claims for jobless benefits rose for the first time after two months of steady declines, but the increase was slight, waswithin expectations and claims remained below the key 400,000 mark, government data showed Wednesday.
Meanwhile, consumer spending rose a notch in October even though incomes increased by a faster pace. Andorders for long-lasting products such aswashing machines, automobiles and aircraft fell for the second straightmonth inOctober.
In all, it was a mixed bag of reports for theeconomy, which has been showing signs of speeding up of late. On Tuesday, the government reported that the economy grew at a 2.0 percent pace in the third quarter, down from an initial estimate of 2.5 percent. Despite the decline, there weresigns in the GDP report that bode well for fourth-quarter growth. In particular, a decline in inventories in the July-September quarter could mean businesses will have to rebuild inventories in the fourth quarter, which, in turn, could propel growth.
That could help the country avoid a recession, which is expected in the euro zone. But economists still see a risk of a U.S. recession next year, especially if lawmakers allow extended unemployment benefits and a payroll tax cut to expire at the end of 2011.
Initial claims for state unemployment benefits climbed to a seasonally adjusted 393,000 from an upwardly revised 391,000 in the prior week,the Labor Department said. Economists polled by Reuters had forecast claims rising to 390,000 from the previously reported 388,000. The four-week moving average of claims, considered a better measure of labor market trends, fell 3,250 to 394,250, the lowest since April.
The Commerce Department saidorders for durable goods fell 0.7 percent in January following a September decline of 1.5 percent. Orders for core capital goods, considered a good proxy for business investment spending, dropped 1.8 percent, the biggest decline since a 4.8 percent fall in January. Manufacturing has been one of the strongest sectors in the economy in this sub-par recovery, but this sector slowed this year as consumer demand faltered and auto factories had trouble getting parts following the March 2011 natural disasters in Japan.
The Commerce Department also reported thatspending increased 0.1 percent last month, the poorest gain in four months. But incomes increased 0.4 percent, the best showing since March. Private wages and salaries drove the income gain.
Without a clearer picture of where the economy is headed, businesses are going to be reluctant to undertake the kind of hiring that will help theeconomy accelerate more. "People are looking for the economy to get restarted and to create more jobs, and that's not happening," said Aetna CEO Mark Bertolini. "Businesses are on the sidelines trying to figure out how this economy is going to work. Until we see that ...we can't really invest fully."
Does the article seem to have an overall positive, negative, or mixed outlook on the American economy?
What are "good signs"?
What are "bad signs"?
Many of the statistics in the article are known as Economic Indicators, which are:
These are important to the study of Macroeconomics, which is:
What is considered the most important economic indicator? Why?
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